Whether decision maker is the risk neutral or risk averge

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Reference no: EM13231368

For each of the following scenarios, determine whether the decision maker is risk neutral, risk averse, or risk loving.

a. A manager prefers a 10 percent chance of receiving $1,000 and a 90 percent chance of receiving $100 to receiving $190 for sure.
b. A shareholder prefers receiving $775 with certainty to a 75 percent chance of receiving $1,000 and a 25 percent chance of receiving $100.
c. A consumer is indifferent between receiving $550 for sure and a lottery that pays $1,000 half of the time and $100 half of the time.

Reference no: EM13231368

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