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MakcuM [25]
3 years ago
9

Let L1 and L2 be two lotteries with the same expected return. Suppose L2 has a larger variance and you are risk averse. Would yo

ur CE for L2 be larger or smaller than your CE for L1?
Business
1 answer:
WITCHER [35]3 years ago
6 0

Answer:

option 2)  smaller

As CE is the amount which if the agent gets with certainty, then agent will be indifferent between playing lottery or getting that amount with certainty

So L2 is more risky, & agent is risk averse, so agent will be ready to accept a lower amount with certainty ( as compared to the amount for a safer option : L1)

So CE of L2 will be lower

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Answer:

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Explanation:

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4 0
3 years ago
g Banks advertise Group of answer choices the real interest rate, which is how fast the dollar value of savings grows. the real
Serhud [2]

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Explanation:

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3 0
3 years ago
White Company's wages payable account had a beginning balance of $3,757 and an ending balance of $2,070. During the year, wages
borishaifa [10]

Answer:

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We simply applied the above formula so that the correct value could come

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7 0
3 years ago
Business firms that sell to retailers and other merchants, and/or to industrial, institutional, and commercial users-but which d
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