Assume Janet is risk-averse. Which of the following bets is she more likely to accept, depending on the degree of risk aversion?
A) Win $40, ¼ of the times; win $10, ½ of the times; and lose $40, ¼ of the times.
B) Win $40, ¼ of the times; break even ½ of the times; and lose $40 ¼ of the times.
C) Win $20, ¼ of the times; win $10, ½ of the times; and lose $20, ¼ of the times.
D) Win $20, ¼ of the times; win $10, ¼ of the times; and lose $20, ¼ of the times.
Correct Answer:
Verified
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