A die is rolled.If it lands 1 or 2,the person receives $90.If it 3 or 4,the person receives $30.00.If it lands 5 or 6,the person receives $60.If the person is willing to pay $60 to take this gamble,they must be

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Quizplus · Accepted Answer

The expected value of the gamble is calculated as follows: (1/3)($90) + (1/3)($30) + (1/3)($60) = $60. Since the person is willing to pay exactly the expected value to take the gamble, they are not risk-averse. They could be considered risk-neutral because they are indifferent to the gamble at its expected value, or risk-preferring if they derive utility from the act of gambling itself. Therefore, they are not exclusively risk-averse.

A Die Is Rolled