Natasha Is Going to Buy a Risky Asset That Has

question 112

Multiple Choice

Natasha is going to buy a risky asset that has an expected value of $62, which yields an expected utility of 146. Equivalently, she could get utility of 146 from a certainty equivalent of $43. What is Natasha's risk premium?

• A)$19
• B)$43
• C)$103
• D)$105

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Definitions:

2008-2009 Recession

A severe global economic downturn triggered by the financial crisis, marked by significant declines in consumer wealth, extensive layoffs, and a contraction in economic activity.

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