A risk averse individual would

Question

Quizplus · Accepted Answer

A risk averse individual prioritizes avoiding losses over maximizing gains. In this case, choosing a certain amount of $5 is preferred over a risky prospect with the same expected value because the potential loss from the risky prospect is avoided. Option B involves taking on more risk and may lead to loss, making it less attractive to a risk averse individual. Option C is unlikely, as a risk averse individual would generally prefer certainty over risk. Option D involves giving up too much potential gain for certainty, making it less attractive to a risk averse individual.

A Risk Averse Individual Would