Explain what is meant by the term risk premium

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Reference no: EM131524464

Question: 1. Why is it important for decision makers to consider their attitudes toward risk?

2. We have not given a specific definition of risk. How would you define it? Give examples of lotteries that vary in riskiness in terms of your definition of risk.

3. Explain in your own words the idea of a certainty equivalent.

4. Explain what is meant by the term risk premium.

Reference no: EM131524464

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