Obi-Wan Is Considering Whether to Buy a Lightsaber

question 107

Multiple Choice

Obi-Wan is considering whether to buy a lightsaber. With probability 0.50 he will value the lightsaber at $4,000, and with probability 0.50 he will value it at $1,000. If Obi-Wan is risk averse, then he will be willing to pay ________ for a new lightsaber.

• A)more than $4,000
• B)more than $2,500
• C)less than $4,000
• D)less than $2,500