Assume X and Y are random variables and they have a correlation coefficient of O

Question

Assume X and Y are random variables and they have a correlation coefficient of O, then we can say X and Y are? a. related 1. b. positively correlated c. negatively correlated d. independent The St. Petersburg Paradox suggests that economic agents maximize a risky choice. a. probabilities 2. associated with respect to b. expected value c. monetary gain d. expected utility If I roll a six sided die, the probability of the outcome of the toss being a 5 is 1/6. Economists refer to this type of probability as being a. an objective 3. probability. b. a known c. a subjective d. stochastic 4. If an individual is determined to be risk neutral, then an economist would conclude that the agent's utility function is a. linear b. convex c. concave d. unknown If you subtract the risk premium associated with a risky financial decision from the expected value of that financial decision you will have the agent'sassociated with that decision. a. profit 5. b. expected utility level c. certainty equivalent d. insurance premium

Explanation / Answer

1. The correct answer is D.

2. The correct answer is B.

3. The correct answer is A.

4. The correct answer is A.

5. The correct answer is C.

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