Final answer:
People are risk averse when dealing with potential wins and losses, as they prefer options that minimize the risk of losses and maximize the probability of success.
Step-by-step explanation:
When it comes to dealing with potential wins and losses, people are generally risk averse to both. This means that individuals tend to prefer avoiding risks and choose options that offer a higher probability of success and lower probability of failure.
For example, when making financial investments, people often opt for safer investments that have a lower potential return but also carry a lower risk of losses. This preference for safety and aversion to risk is influenced by personal preferences and the desire to protect one's resources.
In summary, people are risk averse when dealing with potential wins and losses, as they prefer options that minimize the risk of losses and maximize the probability of success.