If an individual prefers a risky prospect to a sure prospect then:
A)the two prospects must have the same expected value.
B)the risky prospect has a higher expected utility.
C)the individual is irrational.
D)the individual is risk lover.

Question

Quizplus · Accepted Answer

An individual who prefers a risky prospect over a sure one likely perceives higher expected utility from the risky option, indicating a preference for risk.

If an Individual Prefers a Risky Prospect to a Sure