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If a Friend Offers You $75 Dollars If the Coin

Question 2

Multiple Choice

If a friend offers you $75 dollars if the coin flip to open a football game turns out to be heads, but you have to pay him $50 if the coin flip turns out to be tails. What is the risk premium?


A) $12.50
B) $25.00
C) $50.00
D) $75.00
E) $125.00

Correct Answer:

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