Which Statement Is True Concerning the Inclusion of Risk in Any

Multiple Choice

Which statement is true concerning the inclusion of risk in any retention/transfer decision?

A) the element of risk can be accurately included in the decision
B) because risk is a function of a known distribution, there is no need to include it as a factor
C) since the law of large numbers generally eliminates risk-making outcomes accurately predictable, risk is not a factor except in capital budgeting decisions
D) because individuals have different risk preferences and attitudes, risk cannot be accurately and consistently factored into the model