A Risk Premium Is

question 9

Multiple Choice

A risk premium is:

• A)a payment to an insurer by a policy-holder who faces a potential loss.
• B)equal to the purchase price of an insurance policy.
• C)the necessary difference between the expected value of a lottery and the payoff of a sure thing to make the decision maker indifferent between the lottery and the sure thing.
• D)the difference between the expected value and the variance of a lottery.

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Definitions:

Soviet Union

A socialist state in Eurasia that existed from 1922 to 1991, officially known as the Union of Soviet Socialist Republics (USSR), composed of multiple subnational Soviet republics.

My Lai

A village in Vietnam where a massacre of unarmed civilians by U.S. soldiers took place during the Vietnam War.

South Vietnamese

South Vietnamese refers to the people, culture, and former government of South Vietnam, known officially as the Republic of Vietnam, a country that existed from 1955 to 1975, during the Vietnam War era.

Paris Peace Accords

Agreements signed in 1973 to establish peace in Vietnam and end the Vietnam War, involving the US, North Vietnam, South Vietnam, and the Viet Cong.