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xam 2: Modules 4 & 5 rted: Apr 26 at 6:32pm uiz Instructions ct the...

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Finance

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xam 2: Modules 4 & 5 rted: Apr 26 at 6:32pm uiz Instructions ct the best response to each question. Question 8 5 pts a new on-line game where participants can bet on the coin toss that takes place at the start of the Super Bowl. participant loses While there is no entry fee, a participant wins $500 if he picks the team that wins the pre-game coin toss. The $505 if he picks the team that loses the pre-game toss. Assume a fair coin is used. Which of the following is TRUE O Since there is a 50% chance of being correct, risk neutral participants would be willing to play the game. O The expected value to a participant playing the game is losing $2.50. Therefore, no participants regardless of whether they are risk averse risk neutral or risk seeking will play the game The expected value to a participant playing the game is losing $2.50. Therefore, only risk seeking participants will play the game. The expected value to a participant playing the game is winning $2.50. Therefore, risk averse players will play the game. The risk premium to the sponsors of this game is negative. O O Next

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