Asked by Christian Broussard on May 10, 2024
Verified
People who are risk averse dislike bad outcomes more than they like comparable good outcomes.
Risk Averse
The preference for certainty and the avoidance of risk in investments or economic decisions, often leading to choices that offer lower returns in exchange for reduced risk.
Comparable Good Outcomes
Situations where two or more goods or scenarios produce similarly beneficial effects or results.
- Acquire knowledge about the concept of risk aversion and its effect on making decisions.
Verified Answer
ZK
Zybrea KnightMay 11, 2024
Final Answer :
True
Explanation :
Risk-averse individuals have a stronger negative reaction to potential losses than the positive feeling they get from equivalent gains, leading them to avoid situations where there is a risk of a bad outcome.
Learning Objectives
- Acquire knowledge about the concept of risk aversion and its effect on making decisions.