Question

Match each term with its definition.

A. Financial planning.
Personal satisfaction gained from consumption.
B. Rational choice.
Reluctance for taking chances.
C. Risk aversion.
A decision-making method that compares costs and benefits.
D. Utility.
A strategy to save for financial goals.

Answer 1

A. Financial planning. : A strategy to save for financial goals.

B. Rational choice. : A decision-making method that compares costs and benefits.

C. Risk aversion.: Reluctance for taking chances.

D. Utility. : Personal satisfaction gained from consumption.

Step-by-step explanation:

• The terms are described above have a specific meaning and are based on the economic terms of any business environment.

Answer 2

Here is the pair:

- Financial planning - A strategy to save for financial goals.
financial planning is done to ensure that individuals or companies would achieve healthy financial growth.

- Rational choice - A decision-making method that compares costs and benefits.
A choice is considered as rational if the benefit outweigh the cost

- Utility - Personal satisfaction gained from consumption.
For example, when you drink a soda after working out, the loss of thirst is considered to be a utiliy

- Risk aversion - Reluctance for taking chances.
Risk aversion is most commonly used by investors to avoid experiencing unnecessary loss