The utility of a gamble equals ________.
A) the extent of uncertainty associated with utility of the gamble
B) the expected utility of its outcomes
C) the actual utility of its outcome or prize
D) the level of risk associated with the gamble

Question

Quizplus · Accepted Answer

The utility of a gamble is evaluated based on the expected utility of its outcomes. This is because the decision to take a gamble is based on the potential rewards and the associated probabilities of those rewards. Therefore, the expected utility of the outcomes is the most accurate measure of the utility of a gamble.

The Utility of a Gamble Equals ________