Kedran Is Indifferent Between Option A, Which Gives Her $10,000

question 75

Multiple Choice

Kedran is indifferent between option A, which gives her $10,000 for sure, and option B, which gives her $5,000 with probability 0.4 or $15,000 with probability 0.6. Kedran's cost of risk for option B is

• A) zero.
• B) $1,000.
• C) $5,000.
• D) $10,000.

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Definitions:

Cannon-Bard Theory

A theory of emotion that posits emotions and physiological responses occur simultaneously, not sequentially.

Physiological Arousal

The physical state of being alert and engaged, often accompanied by increased heart rate, blood pressure, and energy as a response to a stimulus.

Autonomic Arousal

The activation of the autonomic nervous system, leading to physiological changes such as increased heart rate, sweating, or rapid breathing.

Emotional Experience

The complex state of feeling that results from the interaction of subjective and physiological factors.