Jorge considers himself a risk-averse person. He takes the opportunity to switch to a new job where there are two possible outcomes: there is a 20% chance that he will earn $30,000 more per year than in his current job, and there is an 80% chance that he will get laid off and end up in a job where he is earning $10,000 less than in his current job. What does this decision tell us about Jorge?

Question

Flynn

Business

22 January, 04:21

Jorge considers himself a risk-averse person. He takes the opportunity to switch to a new job where there are two possible outcomes: there is a 20% chance that he will earn $30,000 more per year than in his current job, and there is an 80% chance that he will get laid off and end up in a job where he is earning $10,000 less than in his current job. What does this decision tell us about Jorge?

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Answers (1)

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Alisha Marks · Answer 1

Jorge is not risk-averse

Explanation:

Risk averse means to reluctant to take risk

Since theres a 80% chance that Jorge will get laid off and end up with a job that will pay him $10000 less is very risky instead where he'll earn $30000 where the chance is 20% that he'll get the job.