A Risk Premium

question 15

Multiple Choice

A risk premium

• A)is required to get a risk-neutral person to make a fair bet.
• B)is the maximum amount needed to compensate a decision-maker to willingly take a risk.
• C)is the maximum amount a decision-maker would pay to avoid taking a risk.
• D)is the minimum amount a decision-maker would pay to avoid taking a risk.

---

Definitions:

Market Manipulation

Actions designed to deceive investors by controlling or artificially affecting the price of securities.

General Partner

A member of a partnership who has unlimited liability and is active in the daily management of the business.

Insider

An individual who has access to confidential or non-public information about a company, primarily due to their relationship with the company.

Limited Offers

Promotions or sales propositions available for a restricted time frame or quantity.