The preferences between baskets of outcomes when the state of the world is not yet known are called
A) ex ante preferences.
B) ex post preferences.
C) risk-averse preferences.
D) diversified preferences.

Question

Quizplus · Accepted Answer

Ex ante preferences are preferences that are made before the state of the world is known, such as when making investment decisions. Ex post preferences, on the other hand, are preferences that are made after the state of the world is known. Risk-averse preferences describe a preference for avoiding risk, while diversified preferences refer to a preference for a diversified portfolio of investments.

The Preferences Between Baskets of Outcomes When the State of the World