Attitudes to risk As far as you can tell, are the following peo ple risk prone, risk averse, or risk neutral?

(a) People who invest in the stock market rather than in savings accounts.

(b) People who invest in bonds rather than in stocks.

(c) People who buy lottery tickets rather than holding on to the cash.

(d) People who buy home insurance.

(e) People who play roulette.

(f) People who consistently maximize expected value. (g) People who have unsafe sex. Sometimes it is useful to compute the certainty equivalent of a gamble. The certainty equivalent of a gamble is the amount of money such that you are indifferent between playing the gamble and receiving the amount for sure.