Question

individuals differ in risk aversion because of: group of answer choices differences in their insurance. moral hazard. adverse selection. differences in income or wealth.

Answer 1

Individuals differ in risk aversion because of differences in income or wealth.

• Risk aversion is the propensity of people to choose outcomes with low uncertainty over those with high uncertainty, even when the average outcome of the latter is equal to or higher in monetary worth than the more definite event. This tendency is shown in both economics and finance.
• Risk aversion is the tendency to avoid danger. A risk-averse investor is one who prioritizes money preservation over the potential for a higher-than-average return. Price volatility and investment risk are the same.
• If someone would rather take the risk and maybe receive nothing than accept a definite payment (certainty equivalent) of less than $50 (for instance, $40), they are considered to be risk averse. If they have no preference between the wager and a specific $50 payoff, they are risk neutral.

Thus the correct answer is d.

Refer here to learn more about risk aversion: brainly.com/question/8394406

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