Risk premium is the ________ amount that a ________ person would pay to avoid ________.
A) maximum; risk-averse; taking a risk
B) maximum; risk-neutral; losing everything
C) minimum; risk-averse; taking a risk
D) minimum; risk-loving; losing everything

Question

Quizplus · Accepted Answer

The risk premium is the additional amount that a risk-averse person would pay to avoid taking a risk. Therefore, the answer is A, where the risk-averse person is willing to pay the maximum amount to avoid taking a risk.

Risk Premium Is the ________ Amount That a ________ Person

Risk Premium Is the Amount That a Person