Suppose That,in an Experimental Setting,100 Students Are Asked to Choose

question 67

Multiple Choice

Suppose that,in an experimental setting,100 students are asked to choose between Gamble A and Gamble B,where:
Gamble A: The student will receive $5 million with a 100 percent probability.
Gamble B: The student will receive $5 million with a 50 percent probability,$10 million with a 25 percent probability,and $0 million (nothing) with a 25 percent probability.
A risk-neutral student is

• A) likely to choose Gamble A because it has a higher expected value.
• B) likely to choose Gamble B because it has a higher expected value.
• C) likely to choose Gamble A because the student will win something (as opposed to nothing)with a higher probability.
• D) likely to choose Gamble B because the student will win something (as opposed to nothing)with a higher probability.
• E) indifferent toward both Gambles A and B because they have the same expected value.

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Definitions:

Depersonalization

A condition where one feels detached from one's thoughts, feelings, and body, often described as feeling like an outside observer of oneself.

Sympathetic Nervous System

Part of the autonomic nervous system responsible for the body's 'fight or flight' response to stressful situations.

Parasympathetic Nervous System

A branch of the autonomic nervous system responsible for conserving energy by slowing down the heart rate and increasing intestinal and gland activity.

Integration

The process of combining parts into a whole, refers to the blending of populations, cultures, or systems.