Shantelle faces a risk where she has equal chance of either gaining $2,000 or losing $2,000. Which of the following statements describes her view of the risk if she is risk averse?
A) Losing $2,000 would diminish her well-being more than gaining $2,000 would raise it.
B) Losing $2,000 would diminish her well-being less than gaining $2,000 would raise it.
C) Losing $2,000 would diminisher her well-being just as much as gaining $2,000 would raise it.
D) Both options would have the same impact on her well-being so she is indifferent.
Correct Answer:
Verified
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