Use the Following to Answer Question

question 76

Multiple Choice

Use the following to answer question:
Table 14.11
Income
Clipper's Total Utility
Prince's Total Utility
$ 0
0
0
20,000
100
200
40,000
195
300
60,000
285
350
80,000
370
375
100,000
450
387
-(Table 14.11) Because Clipper is _____ risk averse than Prince, Prince will pay the _____ risk premium.

• A) more; larger
• B) less; larger
• C) less; smaller
• D) more; smaller

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Definitions:

Angel

A wealthy person who funds a new business, typically in return for convertible debt or a share in the company's equity.

Pre-money Valuation

The value of a company as estimated before the injection of new capital or investments.

Post-money Valuation

Refers to a company's valuation after external financing and/or capital injections are added to its balance sheet.

Outside Investment

Funds acquired from external sources, such as venture capitalists or angel investors, to finance the operations or growth of a business.