asked 10.1k views
0 votes
Is a risk neutral person likely to make a fair​ bet? A. No. Risk neutral individuals are indifferent about making a fair bet. B. Yes. Risk neutral individuals are unwilling to make a fair bet. C. No. Risk neutral individuals are willing to make a fair bet. D. Yes. Risk neutral individuals are indecisive about making a fair bet.

asked
User Asmita
by
7.9k points

1 Answer

3 votes

Answer: A. No. Risk neutral individuals are indifferent about making a fair bet.

Explanation: A fair bet is given as a wager with an expected value (the sum of the probability of a payoff times the value of the payoff) of zero. A risk neutral individual is one who is indifferent about making a fair bet thus, such person has a constant marginal utility (the extra pleasure from each extra dollar of wealth) of wealth.

answered
User Kyle Gibson
by
8.5k points

No related questions found

Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.