Risk aversion refers to the tendency to avoid uncertain options, even if they may have a higher expected payoff on average compared to a certain option. It is a common phenomenon in decision-making and can influence various aspects of our lives, including financial decisions, career choices, and personal relationships.

Solved

Risk Aversion Is the

Question 19

Multiple Choice

Risk aversion is the

A) general human tendency to stay away from activities that are dangerous, even if they may be fun.
B) reluctance to choose an uncertain option that, on average, pays better than the certain payoff of a second option.
C) reluctance to enter into any transaction in which the outcome is not known with certainty.
D) tendency to seek out activities that are mildly dangerous but thrilling.

Correct Answer: