Faced with the gamble: heads you win $100; tails you lose $50, we would predict that a risk-neutral person would

Name: Faced with the gamble: heads you win $100; tails you lose $50, we would predict that a risk-neutral person would
Brand: Quizplus
Rating: 5.0 (44 reviews)

Question

Quizplus · Accepted Answer

A risk-neutral person would be indifferent to risk and only focus on the expected return, which in this case is ($100 * 0.5) - ($50 * 0.5) = $25. Since the expected return is positive, a risk-neutral person would take the gamble.

Faced with the Gamble: Heads You Win $100; Tails You