Which of the Following Statements Is Correct for a Decision

question 66

Multiple Choice

Which of the following statements is correct for a decision maker facing a choice between a sure thing and a lottery when the sure thing has the expected payoff of the lottery?

• A)Risk-loving decision makers will require a positive risk premium to bear risk.
• B)Risk-neutral decision makers will require a positive risk premium to bear risk.
• C)Risk-averse decision makers will require a positive risk premium to bear risk.
• D)The risk premium depends on the characteristics of the lottery, not on the characteristics of the utility function of the decision maker.

---

Definitions:

Developmental Groups

Groups focused on the growth and development of their members, often through shared learning experiences, skill-building activities, or supportive interactions.

Psychological Groups

Collections of individuals who share emotional connections, common purposes, or identify as members of the same group.

Cohesive Groups

Groups characterized by strong interpersonal bonds among members, leading to high levels of cooperation and team effectiveness.

Informal Groups

Unofficial and emerge from relationships and shared interests among members.