Question

The EMV that a person is willing to give up in order to avoid the risk associated with a gamble is referred to as the ________.

Answer 1

Answer:

RISK PREMIUM

Explanation:

The EMV that a person is willing to give up in order to avoid the risk associated with a gamble is referred to as the Risk premium

A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield It is paid as a compensation to investors who are willing to take on a risk filled kind of investment .

and it can be calculated using this formula :: Risk Premium = Estimated Return on Investment - Risk-free Rate.