Mary and Bob are trying to decide how much auto insurance to buy.They share the same expectations of an accident,with the same dollar loss.They also have the same income levels.However,Mary would rather buy very little insurance,while Bob would rather buy much more insurance.This suggests that:
A)Bob is more risk-averse than is Mary.
B)Mary is more risk-averse than is Bob.
C)Bob is risk-averse and Mary is risk-loving.
D)Mary is risk-averse and Bob is risk-loving.

Question

Quizplus · Accepted Answer

Bob's preference for more insurance indicates he is more risk-averse than Mary, as buying insurance is a way to mitigate financial risk from potential accidents.

Mary and Bob Are Trying to Decide How Much Auto