Difference between the certain equivalent of a deal

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Question: Consider the following five statements.

a. The difference between the certain equivalent of a deal with free clairvoyance and the certain equivalent of that deal without the clairvoyance represents the value of clairvoyance for any deal.

b. The value of clairvoyance for any deal is equal to the PISP of clairvoyance for that deal.

c. The five Rules of Actional Thought prove that it is not logical to be risk seeking.

d. A risk-averse individual never places a lower value on a deal than a risk-neutral individual, assuming they agree on probabilities and the value of the prospects.

How many of the above statements are false?

i. 1

ii. 2

iii. 3

iv. 4

Reference no: EM131754842

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