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Lecture
Risk and Risk Premium
Description
This lecture covers the concept of risk and risk premium, illustrated through examples like coin flipping games and construction projects. It explains how individuals evaluate lotteries based on their risk aversion and willingness to pay, as well as the equivalent certain value and insurance premium. The lecture also delves into adjusting lotteries to reflect risk aversion, the role of discount rates in risk assessment, and the implicit effects of discount rate adjustments on future incomes and costs.
Official source
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