Hi! Can you help me with the question below? Todd has a job that presents zero risk of death or injury, but has always craved something more exciting. His current annual salary is $50,000. He has been offered a job on an Alaskan fishing boat that will pay$55,000 annually. This new job offer, however, comes with a 10% risk of severe injury that will cause Todd to have no income. Which of the following is true? (Assume the severe injury has no relevant implications besides reducing Todd’s income) A) Todd will definitely take the new job if he’s risk averse.B) Todd will definitely take the new job if he’s risk neutral.C) Todd will definitely decline the new job if he’s risk averse or risk neutral.D) Todd will definitely accept the new job if he’s risk seeking.E) Not enough information to determine.
Hi! Can you help me with the question below?
Todd has a job that presents zero risk of death or injury, but has always craved something more exciting. His current annual salary is $50,000. He has been offered a job on an Alaskan fishing boat that will pay
$55,000 annually. This new job offer, however, comes with a 10% risk of severe injury that will cause Todd to have no income. Which of the following is true? (Assume the severe injury has no relevant implications besides reducing Todd’s income)
A) Todd will definitely take the new job if he’s risk averse.
B) Todd will definitely take the new job if he’s risk neutral.
C) Todd will definitely decline the new job if he’s risk averse or risk neutral.
D) Todd will definitely accept the new job if he’s risk seeking.
E) Not enough information to determine.
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