Two related ways to quantify a person's degree of risk aversion are the certainty equivalent and the risk aversion premium. ?
Answer the following statement true (T) or false (F)
True
Rationale: The lowest possible amount someone is willing to take in order not to participate in a gamble is the certainty equivalent of the gamble. The difference between the expected value of a gamble and its certainty equivalent is the risk premium.
You might also like to view...
Linesha, a college student working part-time received a wage increase. An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs. Based on this information
A) DVDs and Blu-ray discs are substitutes. B) the cross-price elasticity between DVDs and Blu-ray discs is negative. C) DVDs and Blu-ray discs are normal goods. D) Blu-ray discs are normal goods and DVDs are inferior goods.
In 2013, the U.S. spending on research and development was:
a. the lowest among developed countries b. more than any other country c. more than most countries, but not China d. consistent with spending on R&D in 2012
The Affordable Care Act, signed by President Obama in 2010, attempted to solve the health care poverty problem by
A. increasing the income thresholds for Medicaid eligibility. B. requiring all employers to offer free health care to their employees. C. creating a single-payer system in which the government pays for all medical care. D. offering tax credits and subsidies to help low-income households afford insurance.
The so-called "negative taxes" are better known as:
A. Government spending B. Transfer payments C. Built-in stabilizers D. Fiscal multipliers