Option A provides $9,000 with probability 50 percent or $11,000 with probability 50 percent. Option B provides $8,000 with probability 50 percent or $12,000 with probability 50 percent. For most people the cost of risk associated with B is
A) less than that associated with A.
B) the same as that associated with A.
C) exactly twice that associated with A.
D) more than twice that associated with A.

Question

Quizplus · Accepted Answer

The Answer of Option A provides $9,000 with probability 50 percent or $11,000 with probability 50 percent. Option B provides $8,000 with probability 50 percent or $12,000 with probability 50 percent. For most people the cost of risk associated with B is
A) less than that associated with A.
B) the same as that associated with A.
C) exactly twice that associated with A.
D) more than twice that associated with A.

Option a Provides $9,000 with Probability 50 Percent or $11,000