Determine whether each of the following represents loss aversion. a. Nearing retirement, an investor chooses investments with
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a. Nearing retirement, an investor chooses investments with lower return and lower risk, because she wants to make sure she has a certain amount of money available in five years.
b. A gambler refuses to play a game in which if heads shows up after a coin toss he will win $40, but if tails shows up he will lose $50.
c. Offered a brand-new blanket that is twice as comfortable and cute as her old one—the only two criteria she cares about in a blanket—a toddler refuses to give up her old blanket.
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