Author Question: Suppose you are offered a bet. I flip a coin. If heads appears, you get $7,000, but if tails ... (Read 409 times)

stananza · **on:** Nov 23, 2022

Suppose you are offered a bet. I flip a coin. If heads appears, you get $7,000, but if tails appears, you owe me $7,000 dollars. You don't take the bet. This must mean you are ________ (risk-averse/risk-neutral/risk-loving). I offer your friend Lalit an alternative bet: I draw a card from a standard 52 card deck. If the card is a heart, she will get $5,000, but if another suit is drawn, she pays me $5,000. She takes the bet. This must mean Lalit is ________ (risk-averse/risk-neutral/risk-loving).
◦ risk-averse, risk-neutral
◦ risk-averse, risk-loving
◦ risk-neutral, risk-loving
◦ risk-neutral, risk-averse

dadgoere765 · **Reply #1 on:** Nov 23, 2022

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