Which of the following games might a risk-averse person play?
A)a game where she has a 50 percent chance of winning $1 and a 50 percent chance of losing $1
B)a game where she has a 50 percent chance of winning $100 and a 50 percent chance of losing $100
C)a game where she has a 60 percent chance of winning $1 and a 40 percent chance of losing $1
D)a game where she has a 40 percent chance of winning $1 and a 60 percent chance of losing $1

Question

Quizplus · Accepted Answer

A risk-averse person would prefer a game with a higher probability of winning and a lower potential loss. Option C offers a 60 percent chance of winning $1 and a 40 percent chance of losing $1, which is the most favorable outcome for someone who is risk-averse.

Which of the Following Games Might a Risk-Averse Person Play