The Variance of a Lottery Is

question 36

Multiple Choice

The variance of a lottery is:

• A)the average payoff you would get from the lottery if the lottery were repeated many times.
• B)the sum of the probability-weighted squared deviations of the possible outcomes of the lottery.
• C)a measure of risk preference.
• D)the amount an agent would be willing to pay to enter a lottery.

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Definitions:

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