The certainty equivalent of a gamble is negative when tastes are risk loving.

Name: The certainty equivalent of a gamble is negative when tastes are risk loving.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The certainty equivalent represents the amount of money that an individual is indifferent between receiving with certainty or taking a gamble with uncertain outcomes. When tastes are risk-loving, the individual prefers the gamble to the certain outcome, so the certainty equivalent would be positive, not negative.

The Certainty Equivalent of a Gamble Is Negative When Tastes