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:

Private Tort Actions

Legal proceedings initiated by individuals seeking compensation for harm or injury caused by another's wrongful act or negligence.

Environmental Damage

Harm caused to the natural environment due to human activities or natural disasters.

NAAQS

The National Ambient Air Quality Standards, regulations that establish allowable concentration levels of pollutants in the air in the United States.

SIP

An acronym that can refer to several concepts, including Systematic Investment Plan, which allows investors to contribute small amounts periodically into a mutual fund.