Natasha is going to buy a risky asset that has an expected value of $62, which yields an expected utility of 146. Equivalently, she could get utility of 146 from a certainty equivalent of $43. What is Natasha's risk premium? A. $105 B. $19 C. $43 D. $103

The correct answer to the following question is option B) $19.

Explanation:

Given information -

A risky asset with expected value of $62, yields an expected utility of 146

An asset which has certainty equivalent equal to $43 and yields an expected utility of 146,

so one has to find the risk premium of Natasha, then it would be -

Asset with expected value - Asset with certainty equivalent

= $62 - $43

= $19.