gamble that pays either $0 or $100,000 each with a 50% chance? What does your answer imply about whether you are risk averse, risk neutral, or risk seeking (i.e., preferring a risk over its EV)?   What amount would have made you indifferent if I asked you this question when you were 25 years old? Reflect on whether your risk aversion has changed over time. Consider why it has changed or why it has not changed (e.g., due to your financial situation, your matur

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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What amount of money would you need to receive for sure to be indifferent between that amount of money and a gamble that pays either $0 or $100,000 each with a 50% chance? What does your answer imply about whether you are risk averse, risk neutral, or risk seeking (i.e., preferring a risk over its EV)?

 

What amount would have made you indifferent if I asked you this question when you were 25 years old? Reflect on whether your risk aversion has changed over time. Consider why it has changed or why it has not changed (e.g., due to your financial situation, your maturity, both, neither).

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