A person who wishes to avoid risk would pick which of the following choices?
A) a 100% of getting $4,000
B) a 50% chance of winning $8,000 or a 50% chance of winning $0
C) a 50% chance of getting $8,000, 25% chance of getting $16,000 and a 25% chance of losing $16,000
D) All of the above are equal to a person who wishes to avoid risk.

Question

Quizplus · Accepted Answer

A person who wishes to avoid risk would choose an option with a guaranteed outcome. Choice A guarantees a payout of $4,000, whereas choices B and C involve a chance of winning nothing or losing money.

A Person Who Wishes to Avoid Risk Would Pick Which