Answered

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A risk averse individual is offered a gamble that promises a gain of $100 with probability (1)/(2) and a loss of $80 with probability (1)/(2) . Given this situation, they will:
a. Definitely take the gamble.
b. Definitely not take the gamble.
c. Definitely take the gamble if their income is high enough.
d. Take an action that cannot be determined given the information available.

Sagot :

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