Question

a thirty-five-year old entrepreneur with dependents is considering starting a business. she is concerned about protecting her personal assets and making sure that if her company were to fail, she would not lose her home or personal savings. this is an example of an individual:

a. with a high desire for autonomy.
b. with a need for financing.
c. with a lot of available capital.
d. with low risk tolerance.

Explanation:

Analyze the entrepreneur's concerns

The entrepreneur is concerned about protecting her personal assets (home and personal savings) in case her company fails. This shows she wants to limit her personal financial exposure and avoid taking on excessive personal risk.

Define risk tolerance

Risk Tolerance refers to the degree of variability in investment outcomes or business ventures that an individual is willing to withstand. An individual who is highly concerned about losing personal assets has a low willingness to take on such risks.

Evaluate the given options

• Option a: Autonomy refers to independence and self-governance, which does not directly relate to protecting personal assets from business failure.
• Option b: A need for financing relates to acquiring capital, not protecting existing personal assets.
• Option c: Having a lot of available capital does not explain her specific concern about losing her home or savings.
• Option d: A concern about losing personal assets and seeking protection against business failure is a classic indicator of having a low tolerance for financial risk.

Answer:

• a. With a high desire for autonomy.
• b. With a need for financing.
• c. With a lot of available capital.
• d. With low risk tolerance. (Correct answer)