Daniel Bernoulli Was the First One to Provide a Solution

question 57

Multiple Choice

Daniel Bernoulli was the first one to provide a solution to the St.Petersburg paradox in the eighteenth century.Identify this solution.

• A)Individuals' expectation of the amount of expected wealth depends upon their risk attitudes.Risk seekers have the highest expectations.
• B)Individuals do not look at the expected wealth when they bid a lottery price, but the actual wealth of the lottery is the key.
• C)Individuals do not look at the expected wealth when they bid a lottery price, but the expected utility of the lottery is the key.
• D)Individuals do not look at the expected utility when they bid a lottery price, but the expected wealth of the lottery is the key.
• E)Individuals do not look at the expected utility when they bid a lottery price, but the actual wealth of the lottery is the key.

---

Definitions:

Mean

The arithmetic average of a set of values, calculated by dividing the sum of all values by the number of values.

Scores

Numerical values that represent the result of an evaluation or measurement.

Z Score

A statistical measure that describes a value's relationship to the mean of a group of values, expressed in units of standard deviation.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how much individual data points deviate from the mean.