Suppose option A has a lower expected value than option B. Which of the following statements is, in general, true?
A. A risk-neutral person is indifferent between options A and B.
B. A risk-averse person prefers option B to option A.
C. A risk-averse person prefers option A to option B.
D. Insufficient information to determine.
Answer: B
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What will be an ideal response?
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