If a person is risk neutral,then she
A) is indifferent about playing a fair game.
B) will pay a premium to avoid a fair game.
C) has a horizontal utility function.
D) has zero marginal utility of wealth.

Question

Quizplus · Accepted Answer

A risk-neutral person is completely indifferent to risk and only cares about expected value. Therefore, a fair game (where the expected value is equal to the cost to play) would be just as desirable as not playing at all.

If a Person Is Risk Neutral,then She