Which of the following statements about the ‘What is Risk?’, ‘Risk and Human Bias’ and ‘What is Risk Management?’ sections of the lecture material are TRUE:

1. An individual can either lose $100 for certain (with 100% probability) or take a gamble. The gamble involves a 10% probability of losing $1,000 and a 90% probability of losing $0. A typical person exhibiting human bias would usually take the gamble, even though the rational risk-averse choice would be to take the certain loss of $100.
2. An individual is considering how to manage the risk of damage to their motor vehicle. Four methods to manage that risk that are consistent (in any order) with the MEAT acronym would be as follows: (i) sell the motor vehicle and use public transport, (ii) always drive defensively and obey the speed limit, (iii) take out comprehensive motor vehicle insurance and (iv) set aside enough funds in a savings account for major repairs or to buy a new vehicle if necessary.