Asked by armaan singh on Sep 24, 2024
Verified
Most people buy insurance because they
A) are risk lovers
B) enjoy the gamble
C) are risk neutral
D) are risk averse
Risk Averse
Describes individuals or entities that prefer to avoid risk and would rather choose options with more certain outcomes over riskier ones.
Insurance
A financial product that provides protection against potential future losses or damages in exchange for a premium.
- Gain an understanding of the notion of risk aversion and its impact on insurance buying habits.
Verified Answer
TC
Timothy Conwayabout 7 hours ago
Final Answer :
D
Explanation :
Most people buy insurance because they are risk averse, meaning they prefer to avoid or minimize the risk of financial loss. Insurance provides a form of protection against unexpected events and helps individuals manage their exposure to risk.
Learning Objectives
- Gain an understanding of the notion of risk aversion and its impact on insurance buying habits.