Which one of the following statements regarding the certainty equivalent (CE) is true? (A) The CE gives your willingness to pay for a reduction in uncertainty (B) The CE gives your utility in the absence of a gamble (C) The CE gives the level of utility that gives the same amount of utility as facing a gamble (D) The CE is always greater than the expected value of a gambleYou are taking a vacation to a tropical island during hurricane season. Each day of the trip costs $1,000. Your trip is a 5 day trip. If there is a tropical storm, you trip will be cut short to 3 days. If there is a hurricane, your entire trip will be cancelled. You cannot get a refund for any days cancelled. There is a 40% chance of a tropical storm and a 20% chance of a hurricane. Which of the following products provides insurance against bad weather: (A) A policy where you pay $800 before the trip, and it pays you a benefit of $2,000 with a random probability of 40% (B) A policy where you pay $900, and it pays you a benefit of $1,000 if there is a tropical