ABC Corp. has a bonus paln for its CEO, linking her pay to annual earnings. ABC will pay her $180,000 if earnings are high, $90,000 if they are normal, and $0 if they are low. Each event is estimated to have equal probability. Assume the CEO is indifferent between this bonus plan and receiving $75,000 with certantity. Which of the following is true ?

a) The CEO's expected bonus is $90,000.

b) The CEO is willing to give up $15,000 in expected bonuses in order to avoid the risky scheme.

c) $85,000 is the CEO's certainty equivalent for the current bonus plan.

d) The CEO has no clue about risk management.

What is the correct answer ?