A person who is ________ is likely to pay more for insurance to protect against financial loss than a person who is ________.
A) afflicted by the hot-hand fallacy; afflicted by the gambler's fallacy
B) a risk taker; risk averse
C) a risk taker; risk neutral
D) risk averse; a risk taker
E) risk neutral; risk averse

Question

Quizplus · Accepted Answer

A risk averse person is someone who prefers to avoid taking risks and is willing to pay more to protect against potential financial loss. On the other hand, a risk taker is someone who is willing to take on more risk and therefore may not see the need to pay as much for insurance.

A Person Who Is ________ Is Likely to Pay More