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Deviation
- Difference between the expected and actual payoff
- Adjusting for the negative numbers
- The standard deviation measures square root of average of squares of the deviations of the payoffs associated with every outcome from their expected value.
- The standard deviation can be given by:
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#question.what is elasticity of demand? .
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Risk Loving - A person is a risk loving if they show a preference toward the uncertain income over a certain income having same expected value. Examples: Gambling, some
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