A risk-averse person
A)would necessarily not play a game where she had a 50 percent chance of winning $1 and a 50 percent chance of losing $1.
B)would necessarily not play a game where she had a 75 percent chance of winning $1 and a 25 percent chance of losing $1.
C)Both A and B.
D)Neither A nor B.

Question

Quizplus · Accepted Answer

A risk-averse person would not play a game where there is a possibility of losing money. In option A, there is a 50% chance of losing money, so a risk-averse person would not play this game. Option B has a higher chance of winning and a lower chance of losing, so a risk-averse person may be willing to play this game.

A Risk-Averse Person