Question

An individual is on the game show Squeal or No Squeal, and she has a choice between receiving a certain gain of $100,000 and receiving a 50% chance of winning $200,000 or zero. If she takes the gamble instead of the certain $100,000, she is acting _________.
A) irrationallyB) like a person who is risk neutralC) like a person who is a risk loverD) like a person who is risk averse

Answer 1

Answer: C- like a person who is a risk lover

Explanation: A risk lover is someone that likes to take risks. Risks are future uncertainties and can be positive or negative.

An individual's ability to take risks on investment or gamble to earn a higher return is called a risk taker or risk lover. The result can be positive or negative.

A risk lover accepts whatever outcome he/she gets on the risk taken.