Question

In deciding how to frame a question, ________ frames promote ________ behavior and ________ frames promote ________ behavior.

adverse; risk aversion; favorable; risk seeking

adverse; risk seeking; favorable; risk aversion

gain; risk aversion; loss; risk seeking

gain; risk seeking; loss; risk aversion

Answer 1

Adverse means harmful or unfavourable i.e. the one which prevents success or development and leads to loss. But Favourable means harmless or advantageous or which gives profit.

Risk aversion is the behaviour of not liking risk or not willing to take risk or avoiding risk. But risk seeking is the behaviour of taking risk in investment or trading. A risk seeking person is willing to take a volatile or uncertain investment decision if it leads to higher expected returns.

From the above definitions we come to know that a person will be willing to take a high risk if he thinks that there is a chance of getting a very high return here as compared to not taking the risk. But if the expected return is not so high than he will not like to take more risk. So the above statement will go as -

In deciding how to frame a question, adverse frames promote risk aversion behaviour and favourable fremes promote risk seeking behaviour.

So option 1 must be correct answer.