If Shaniq Is a Risk Averse, Then

question 40

Multiple Choice

If Shaniq is a risk averse, then

• A) her cost of risk exceeds $0.
• B) she has diminishing marginal utility of wealth.
• C) she is willing to buy insurance if the cost of insurance is low enough.
• D) all of the above.

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Definitions:

Net Transfers

The net amount of money, goods, or services being transferred from one entity to another, after accounting for inflows and outflows.

Balance of Capital

The net flow of capital, such as money and assets, into or out of a country, reflecting all financial transactions.

Financial Account

A component of a country’s balance of payments that records transactions of international investments, both private and public.

Financial Account Items

Components of the financial account in the balance of payments, representing transactions that involve financial assets and liabilities across borders.