Jill is offered a choice between receiving $50 with certainty or the proceeds from a gamble.In the gamble a fair coin is tossed and if it comes up heads Jill will receive $100,if the coin comes up tails she will receive nothing.Jill chooses the $50 instead of the gamble.Jill's behavior indicates __________________.
A) regret avoidance
B) overconfidence
C) that she has a diminishing marginal utility of wealth
D) prospect theory loss aversion

Question

Quizplus · Accepted Answer

Jill's choice of the certain $50 over the gamble, which has an expected value of $50, suggests she prefers certainty and is risk-averse, indicating diminishing marginal utility of wealth.

Jill Is Offered a Choice Between Receiving $50 with Certainty