If a Risk-Averse Agent Is Faced with Two Gambles, Both

question 27

Multiple Choice

If a risk-averse agent is faced with two gambles, both of which have the same expected monetary return but different variances, the agent will always choose the gamble whose variance is

• A) greater
• B) smaller
• C) equivalent

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Definitions:

Adaptive Behaviour

The ability of an individual to modify their actions, responses, and strategies in response to new or changing environments to effectively meet goals or challenges.

Task Analysis

The process of breaking down a task into its component parts to understand the skills, knowledge, and processes involved in its completion.

Needs Analysis

The process of identifying and evaluating the needs or gaps within an organization or among individuals to determine the required training interventions.

External Service Provider

A third-party company or individual that offers services outside of the primary organization's core activities.