George is considering buying shares of Intel. If the company does well, he will gain $100, but if the company does poorly, he will lose $100. George is risk averse, so for George the magnitude of the pain of losing $100 will ________ the pleasure of gaining $100.
A) equal
B) be less than
C) be greater than
D) None of the above answers are correct because we cannot compare the pain of losing to the pleasure of gaining.

Question

Quizplus · Accepted Answer

Risk-averse individuals experience losses more intensely than gains of the same magnitude, so the pain of losing $100 will be greater than the pleasure of gaining $100.

George Is Considering Buying Shares of Intel