The strategy selected on the basis of maximizing expected monetary value is the same as that selected on the basis of maximizing expected utility if
A) an individual is risk averse.
B) an individual is risk neutral.
C) an individual is risk seeking.
D) None of the above is necessarily correct.

Question

Quizplus · Accepted Answer

Maximizing expected monetary value and maximizing expected utility lead to the same decision when an individual is risk neutral. This is because a risk-neutral person values potential outcomes based solely on their monetary value, without adjusting for risk, which aligns with the concept of expected monetary value.

The Strategy Selected on the Basis of Maximizing Expected Monetary