Question
You won a change to play a coin flip game where you get $2,000 if the coin comes p heads or get $1,000 if the
You won a change to play a coin flip game where you get $2,000 if the coin comes p heads or get $1,000 if the coin comes up tails. Assume a fair coin is used. Which of the following is TRUE?
a) a risk neutral person would be willing to accept a cash payment of $1000 to forgo playing the game
b) A risk averse person would be willing to accept a cash payment of less than $1500 to forgo playing the game
c) A risk-seeking person would have to be paid more than $2000 in cash to forgo playing the game
d) the expected value of playing this game is winning $2000
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