What are the different categories of risk preferences? Explain. ...

[rachel9]

What are the different categories of risk preferences? Explain.
 
  What will be an ideal response?

Question 2

If Ed Sike (who you met in Chapter 8 ) lowers ticket prices to a point where the number of tickets demanded is greater than the number of seats available,
 
  A) Ed will be in a good position to grant favors to his friends.
  B) net revenue will be negative.
  C) net revenue will be positive but not necessarily at the maximum level.
  D) resources will not be allocated efficiently.
  E) total revenue will be maximized.

[katieost]

Answer to Question 1

The three categories of risk preferences are:
a) Risk-averse: Risk-averse people prefer to invest in options that have less risk.
b) Risk-neutral: Risk-neutral people do not care about the level of risk involved in investment options.
c) Risk-loving: Risk-loving people prefer to invest in options that have high risk.

Answer to Question 2

A

[rachel9]

Thank you

[katieost]

No problemo