The certainty equivalent is the certain dollar amount a risk-averse decision maker would accept in order to avoid a gamble altogether.

Name: The certainty equivalent is the certain dollar amount a risk-averse decision maker would accept in order to avoid a gamble altogether.
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The certainty equivalent is indeed the guaranteed amount of money that a risk-averse individual would accept instead of taking a gamble with uncertain outcomes, reflecting their preference for certainty over risk.

The Certainty Equivalent Is the Certain Dollar Amount a Risk-Averse