What Term Best Describes a Payment Above and Beyond the Expected

question 2

Multiple Choice

What term best describes a payment above and beyond the expected outcome of a gamble which must be offered to a risk-averse individual to willingly accept the gamble?

• A)Certainty equivalent
• B)Risk equivalent
• C)Risk premium
• D)Risk preference payment
• E)Certainty payment

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Definitions:

Reproductive Certainty

The assurance or confidence an individual has regarding their ability or possibility to successfully reproduce.

Core Motives

Fundamental drivers of human behavior that include needs for belonging, understanding, controlling one's environment, enhancing self, and trusting others.

Physical Or Emotional Pleasure

The feeling of happiness or satisfaction resulting from an activity or experience that affects the body or mind.

Self-Worth

A person's own perception of their self-worth or personal value.