The greater the risk associated with an outcome and the more risk averse the decision maker, the more likely a high insurance premium will be paid.

Question

Quizplus · Accepted Answer

This statement is true as individuals who are more risk averse are more likely to seek protection from potential financial losses through insurance coverage, and they may be willing to pay higher premiums to reduce their exposure to risk. Additionally, higher-risk outcomes may be associated with higher insurance premiums to account for the greater likelihood of a loss occurring.

The Greater the Risk Associated with an Outcome and the More