If a decision maker is risk averse, then the best strategy to select is the one that yields the
A) highest expected payoff.
B) lowest coefficient of variation.
C) highest expected utility.
D) lowest standard deviation.

Question

Quizplus · Accepted Answer

Risk-averse decision-makers prioritize strategies that maximize their expected utility rather than simply aiming for the highest expected payoff, as utility captures their subjective valuation of outcomes, including their aversion to risk.

If a Decision Maker Is Risk Averse, Then the Best