Asked by Sheldon Andrews on Sep 24, 2024
Verified
Someone who values a lottery at its expected value is
A) A risk lover
B) Risk neutral
C) Risk averse
D) most likely to play a lottery
Expected Value
The forecasted value of a variable, determined by adding together all potential values, each weighted by its likelihood of happening.
Risk Neutral
A situation or attitude where an individual or entity is indifferent to risk when making a decision.
- Define the traits of persons according to their estimates of lottery values.
Verified Answer
CM
Carlos M Rosabal Labradaabout 12 hours ago
Final Answer :
B
Explanation :
Someone who values a lottery at its expected value is considered risk-neutral. This means that they neither prefer risk nor do they shy away from it. They are indifferent to outcomes and are only focused on the expected value.
Learning Objectives
- Define the traits of persons according to their estimates of lottery values.