Which of the following games might a risk-averse person be willing to 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 60 percent chance of winning $1 and a 40 percent chance of losing $1.
C)Both A and B.
D)Neither A nor B

Question

Quizplus · Accepted Answer

A risk-averse person is someone who is hesitant to take risks and prefers to avoid losses. In game A, there is an equal chance of either winning or losing, indicating a higher level of risk, which a risk-averse person might avoid. On the other hand, game B has a higher chance of winning (60 percent), meaning the game is less risky since the odds are in favor of winning. Therefore, a risk-averse person might be willing to play game B.

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