A Consumer Who Is Risk Averse Is Best Characterized as ________

question 103

Multiple Choice

A consumer who is risk averse is best characterized as ________.

• A) a consumer who may accept a risky prospect even if the expected gain is negative
• B) a consumer who demands a positive expected gain as compensation for taking risk
• C) a consumer who completely ignores risk and makes his or her decisions based solely on expected values
• D) None of the above

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Definitions:

Sustainable Rate Of Growth

The maximum rate at which a company can grow its revenues without needing to obtain additional financing.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs of goods sold, representing the proportion of sales that turns into profit.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, calculated by dividing the total dividends by the net income for the same period.