Savers Who Are Risk-Averse

question 53

Multiple Choice

Savers who are risk-averse

• A)care only about expected returns.
• B)care only about the variability of returns.
• C)care about both expected returns and the variability of returns.
• D)always prefer an investment with a higher expected return to one with a lower expected return.

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Definitions:

General Adaptation Syndrome

A three-stage process (alarm, resistance, exhaustion) described by Hans Selye that the body goes through in response to stress.

Alarm Stage

The initial phase of the stress response where the body reacts to a perceived threat by preparing for fight or flight.

Bad Stress

Negative psychological or physical response to perceived pressures or threats, often affecting health and well-being.

Alarm Stage

The initial phase of the body's response to stress, activating the "fight or flight" mechanism.