Description
Learning Engagement # 4
TOPIC:
I offer you one of the following two options:
1- I’ll give you $100
2- I’ll throw a coin. If it is heads, I’ll give you $0, if it is tails I’ll give you $200.
Which one of these two options will you accept? What does the choice say about your risk preference?
PROFESSOR’S GUIDANCE FOR THIS WEEK’S LE:
This question is about investors risk preferences. Some investors are risk neutral. Some investors are risk averse. That distinction influences how much risk premium they ask for taking risk.
Be sure to proofread carefully (Use Grammarly – the premium version! Make sure your writing score is more than 90) and cite your sources (APA 7.0 ed).
