If two projects with uncertain outcomes had the same expected value,but project A had two similar but uncertain outcomes with similar probabilities of occurrence while project B had a low probability of a disaster and a high probability of a positive outcome a ________ decision maker would choose Project A.
A)risk-neutral
B)risk-loving
C)risk-averse
D)perfectly informed

Question

Quizplus · Accepted Answer

A risk-averse decision maker would choose Project A because it has two similar but uncertain outcomes with similar probabilities of occurrence, which reduces the overall level of risk compared to Project B's low probability of a disaster.

If Two Projects with Uncertain Outcomes Had the Same Expected