Most people purchase insurance because they are _____. risk-tolerant risk-averse risk-return risk indifferent

Most people purchase insurance because they are _____.

		risk-tolerant
		risk-averse
		risk-return
		risk indifferent

Expert Solution

Most people purchase insurance because they are RISK-AVERSE

Risk Averse is a person who does not prefer to take risks and try to avoid or mitigate them.

jeff jeffy answered 3 years ago

Most people buy insurance because they a. are risk lovers b. enjoy the gamble c. are...

Most people buy insurance because they a. are risk lovers b. enjoy the gamble c. are risk neutral d. are risk averse

DEFINITION OF TERMS: MATCHING A. Risk Tolerant A. Infrastructure B. Risk Averse B. Reactive Management C....

DEFINITION OF TERMS: MATCHING A. Risk Tolerant A. Infrastructure B. Risk Averse B. Reactive Management C. Proactive Management C. Sustained Competitive Advantage D. Stages of Growth of a Firm Model D. Proof of Concept E. Entrepreneur E. Monetization 88. The “internals” of a system or structure, such as the sewage, road, and electric systems of a city. 89. Making money out of an idea. The process of turning an idea into a way to make money. 90. When someone “is...

QUESTION 20 Assume that investors have recently become more risk averse (less risk tolerant), so the...

QUESTION 20 Assume that investors have recently become more risk averse (less risk tolerant), so the market risk premium (r m - r RF) has increased. Also, assume that the risk-free rate and expected inflation have not changed. Which of the following is most likely to occur? 1. The required rate of return on a riskless bond will decline. 2. The required rate of return for an average stock (beta =1) will increase by an amount equal to the increase...

S-13 Differentiate among the three basic risk preferences: risk-indifferent. risk-averse, and risk-seeking. Which of these attitudes...

S-13 Differentiate among the three basic risk preferences: risk-indifferent. risk-averse, and risk-seeking. Which of these attitudes toward risk best describes most investors? S-14 Describe the steps involved in the investment decision process. Be sure to mention how returns and risks can be evaluated together to determine acceptable investments. S-15 What is an efficient portfolio, and what role should such a portfolio play in investing? S-16 How can the return and standard deviation of a portfolio be determined? Compare the calculation...

The risk-free rate is currently at a 5% rate of return. A risk-averse investor with a...

The risk-free rate is currently at a 5% rate of return. A risk-averse investor with a risk aversion of A = 3 should invest entirely in a risky portfolio with a standard deviation of 18% only if the risky portfolio's expected return is at least

Consumers purchase insurance because they are required to and to manage risk. Describe briefly at least...

Consumers purchase insurance because they are required to and to manage risk. Describe briefly at least three of the following types of insurance: homeowner or renter, auto, healthcare, life, and disability. Which types are you required to purchase? Which types have you chosen to manage your risk? When choosing between insurance policies with higher payments but lower deductibles versus those with lower payments but higher deductibles, which are you more likely to choose? Why? Provide rationale and examples to support...

Explain the relationship between risk-loving and risk-averse investors, and the strategy of diversification? True, because the...

Explain the relationship between risk-loving and risk-averse investors, and the strategy of diversification? True, because the benefits to diversification are greater for a person who cares more about reducing risk?

Question

Most people purchase insurance because they are _____. risk-tolerant risk-averse risk-return risk indifferent

Solutions

Expert Solution

Related Solutions