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Suppose You Are Offered the Following 2 Prospects, A: (0

Question 3

Multiple Choice

Suppose you are offered the following 2 prospects, a: (0, 1, 0: 3000, 2000, 1000) or b: (1/2, 1/4, 1/4: 3000, 2000, 1000) . If your preference ordering is such that a is preferred to b, then:


A) you are a risk- neutral individual.
B) you are a risk- averse individual.
C) you are a risk- inclined individual.
D) your risk preferences cannot be determined without further information.

Correct Answer:

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