FRM Financial Risk Manager Practice Test

Mike will roll the dice. A gambler tends to accept fair gambles, while a risk-averse person would refuse it.

Key Takeaway: While this is the terminology, remember that the distribution of outcomes is typically a far more important determinant. Mike might like to gamble when the chances of winning are 50/50, but if the gamble is $1 billion versus certain death, he might be less of a gambler.