Risk Aversion: Definition, Principle & Example


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Someone who is considered to be a risk averse person:

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1. The concept of an individual faced with uncertainty and how they react to that uncertainty is the definition of what?

2. A person who is a risk averse investor would rather take a lower risk even if it means what?

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About This Quiz & Worksheet

The principle of risk aversion is applicable in many situations, and this quiz and worksheet have been written to see what you know about this concept. The quiz asks a variety of questions to see if you can correctly identify traits of risk averse individuals.

Quiz & Worksheet Goals

In the assessment, you will be tested on these topics:

  • An acceptable outcome for a risk averse investor
  • Low risk and high risk investments
  • The main trait of risk averse individuals

Skills Practiced

Become an expert at using these important skills by completing the quiz and worksheet:

  • Reading comprehension - ensure that you draw the most important information about the risk aversion principle from the related lesson
  • Making connections - use your understanding of the concept to identify a key trait of a person who is risk averse
  • Information recall - access the knowledge you have gained about low risk investments
  • Knowledge application - use your knowledge to answer questions about the principle of risk aversion

Additional Learning

Challenge yourself to learn more by checking out the comprehensive lesson called Risk Aversion: Definition, Principle & Example. You will find these key objectives in the lesson:

  • Understand how buying and selling in an online forum can illustrate the risk aversion principle
  • Identify examples of how risk averse people may react in a gambling environment
  • Learn how the best investment for risk averse people might not be perceived as the best use of their money by non-risk averse individuals