A risk avoider is a person for whom the utility of an outcome
A)decreases as the monetary value increases.
B)stays the same as monetary value increases.
C)increases at an increasing rate as the monetary value increases.
D)increases at a decreasing rate as monetary value increases.

Question

Quizplus · Accepted Answer

Risk avoiders exhibit a utility function where the utility increases with monetary value, but at a decreasing rate. This reflects their increasing reluctance to risk as the stakes get higher, preferring certainty over potential higher, but riskier, returns.

A Risk Avoider Is a Person for Whom the Utility