Given That Tamar Is a Risk-Averse Person,she Might Accept a Bet

question 55

Multiple Choice

Given that Tamar is a risk-averse person,she might accept a bet with a 50 percent chance of losing $100 today if she had a 50 percent

• A)chance of winning $120 in two years and the interest rate was 11%.
• B)chance of winning $114 in two years and the interest rate was 7%.
• C)chance of winning $110 in two years and the interest rate was 3%.
• D)None of the above are correct;a risk averse person would not accept any of the above bets.

---

Definitions:

Sympathetic

Part of the autonomic nervous system involved in the body's fight or flight response, regulating heart rate, blood flow, and other functions.

Epinephrine

A hormone and neurotransmitter also known as adrenaline; it increases heart rate, constricts blood vessels, and dilates air passages.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting blood pressure, heart rate, and sugar metabolism.

Sympathetic

Pertaining to the part of the autonomic nervous system that typically prepares the body for intense physical activity and is often referred to as the fight-or-flight response.