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Suppose Jack is indifferent between two lotteries Ll and L2. What is the risk premium (RP) of L2? (25 pts.) Ll: With probability 1, Jack

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Suppose Jack is indifferent between two lotteries Ll and L2. What is the risk premium (RP) of L2? (25 pts.) Ll: With probability 1, Jack gains $200. L2: With probability 0.4, Jack gains $300, and with probability 0.6, Jack gains $200. Select one: O a. RP = 40 O b. RP = 10 O c. RP = 95 O d. RP = -40 O e. RP = -10 O f. RP = -95

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