People who want to reduce the risk they face may pay other people who are less sensitive to risk to take on some of their risk.As a result:
A)a market for risk is illegal.
B)trade in risk reduces mutual gains.
C)total risk increases.
D)people who are willing to accept more risk will purchase from people who are less willing.

Question

Quizplus · Accepted Answer

When people who are less sensitive to risk are paid to take on risk from others, it creates a market for risk. This allows people who are more risk-averse to transfer some of their risk to those who are more willing to accept it. This can result in a more efficient allocation of risk and may lead to mutual gains for both parties involved.

People Who Want to Reduce the Risk They Face May