Consider the following gamble: on the toss of a fair coin, you receive $10 million if a head appears and nothing if a tail appears. What is Diane Eaton's reservation price for the gamble?
A)$5 million
B)$6 million
C)$100,000
D)cannot be determined from the information provided

Question

Quizplus · Accepted Answer

The reservation price for a gamble depends on the individual's level of risk aversion, which is not provided in the information about Diane Eaton. Therefore, it cannot be determined from the given information.

Consider the Following Gamble: on the Toss of a Fair