Which statement is true concerning the inclusion of risk in any retention/transfer decision?
A)the element of risk can be accurately included in the decision
B)because risk is a function of a known distribution, there is no need to include it as a factor
C)since the law of large numbers generally eliminates risk-making outcomes accurately predictable, risk is not a factor except in capital budgeting decisions
D)because individuals have different risk preferences and attitudes, risk cannot be accurately and consistently factored into the model

Question

Quizplus · Accepted Answer

Risk is subjective and cannot be accurately predicted or factored into the decision model due to different individual risk preferences and attitudes.

Which Statement Is True Concerning the Inclusion of Risk in Any