A Person Who Wishes to Avoid Risk Would Pick Which

question 255

Multiple Choice

A person who wishes to avoid risk would pick which of the following choices?

• A) a 100% of getting $4,000
• B) a 50% chance of winning $8,000 or a 50% chance of winning $0
• C) a 50% chance of getting $8,000, 25% chance of getting $16,000 and a 25% chance of losing $16,000
• D) All of the above are equal to a person who wishes to avoid risk.

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Definitions:

Canadian Dollars

The official currency of Canada, denoted as CAD.

Mexican Pesos

The currency of Mexico, used in financial transactions within the country.

Invested

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Absolute Purchasing Power Parity

A theory that states the price of goods in one country should equal the price of the same goods in another country when exchange rates are considered.