Why Risks Can Go Wrong Reading Answers: IELTS Reading Practice Test with Answers

updated at

Updated on Apr 04, 2025, 07:07

The IELTS Reading section tests your ability to understand and analyse different types of texts within a 60-minute time limit. You will encounter three passages with increasing difficulty, followed by 40 questions that assess skills such as skimming, scanning, and identifying key details. The test includes various question types, such as multiple choice, summary completion, and short answer questions.
 

Why Risks Can Go Wrong Reading passage explores the reasons behind poor risk assessment and decision-making. It discusses psychological biases, cognitive errors, and external factors that lead people to misjudge risks in everyday situations.


Let’s look at the Why Risks Can Go Wrong reading answer passage, questions, and answers with explanations.

On this page

Arrow right
Slider image

1. Why Risks Can Go Wrong Reading Answer Passage

You should spend approximately 20 minutes answering Questions 1 – 13 based on Why Risks Can Go Wrong Reading Answer Passage below.

Read More Down arrow
1/ 4
Slider image

2. Why Risks Can Go Wrong Reading Answers with Sample Questions

Discover exciting and informative IELTS reading answers about Why Risks Can Go Wrong.

Read More Down arrow
2/ 4
Slider image

3. Check Out Top 40+ IELTS Reading Practice Test Questions with Answers

Below are some top free IELTS Reading Practice test online questions with detailed answers to enhance your IELTS preparation online. 

Read More Down arrow
3/ 4

More for you

Boost Your IELTS Reading Score

Practice IELTS Reading Answers arrow right

4-Week IELTS Course with
 

Band Jump Guarantee

Attend Free Masterclass arrow right
4/4
1.

Why Risks Can Go Wrong Reading Answer Passage

General Information

  • Read Instructions: Understand each question before answering.
  • Manage Time: Spend about 20 minutes per passage.
  • Skim and Scan: Quickly get the main idea and find specific information.
  • Highlight Key Info: Underline essential words or phrases.
  • Answer All Questions: Attempt every question; no penalty for wrong answers.
  • Stay Focused: Avoid distractions and keep your attention on the task.
  • Check Spelling: Ensure correct spelling and grammar.
  • Transfer Answers Clearly: Write answers neatly on the answer sheet.
  • Don’t Dwell: Move on if stuck and return later.
  • Review: If time allows, review your answers.

 

 

Why Risks Can Go Wrong Reading Answer Passage

 

 

Paragraph A. People make dreadful choices regarding the future. It's apparent to see in everything from their stock market trading to the way they manage their companies. As a matter of fact, people are notoriously lousy at handling uncertainty, continually underestimating some types of danger while overestimating others. There must be a better way than just going with your gut, right?

 

Paragraph B. A young American research psychologist named Daniel Kahneman became interested in the illogic of human decision-making in the 1960s. That was the beginning of his mission to demonstrate the irrationality of human behaviour. The idea of using psychological insights in economics and business decisions was met with some scepticism when Kahneman and his colleagues first began their study. However, the subfields of behavioural finance and economics have flourished during the past decade, and in 2002, Kahneman shared the Nobel Prize in economics. He is in high demand these days among corporations and financial institutions around the world. However, he claims that many organisations continue to disregard the causes of their poor judgement. Instead of being random, he says, these slip-ups follow a pattern that may be anticipated.

 

Paragraph C. Over-optimism is a frequent contributor to poor judgement. In spite of evidence to the contrary, most individuals will continue to see nothing but sunshine if you ask them about the future. According to polls, investors are much more bullish in their expectations for the stock market's future than the market's long-term gains justify. The same holds true for their expectations of winning lottery prizes or seeing a steady increase in the value of their properties. Managers and athletes alike can benefit from this kind of confidence, which can occasionally become a self-fulfilling prophecy. Unfortunately, it usually leads to frustration and disappointment. There are three forms of hubris identified by Kahneman's research. To begin, the majority of people overestimate their own abilities; for example, in surveys, a lot less than half of people think they are below-average drivers. Second, they put too much stock in their own abilities and too little in luck, attributing their successes to the latter rather than the former. Thirdly, when engaging in competitive activities like stock trading, they fail to remember that they must evaluate their own performance in relation to that of their rivals.

 

Paragraph D. A second reason people make poor choices is that the first meeting is often the deciding factor, especially in monetary talks. The term "anchor effect" describes this phenomenon. Mentioning a person gives that person an eerie power on the human psyche. If we use a home sale as an example, the initial asking price is often the starting point for discussions. The same holds true for discussions of compensation or mergers and acquisitions. If no one has any solid facts, a number can be reassuring, even if it could cause a disastrous miscalculation.

 

Paragraph E. Furthermore, stubbornness can lead to blunders. It's never easy to give up on a long-held conviction, and the longer you wait after making a decision, the more ingrained that decision becomes. Companies in the pharmaceutical industry must make the tough call of terminating an unsuccessful research project before too much money is wasted. Similarly, experts' early commitment to a single theory may have skewed their perspective. New eyes are always welcome.

 

Paragraph F. Personal experience is also heavily weighted in people's decision-making, even though it may not be the best indicator of truth. Someone may make the mistake of investing in an overpriced stock because a close relative made thousands. Most investors limit their investments to the country in which they are based because they place too much value on information that is near at hand. While most people are aware that diversifying one's holdings is a good idea, the majority of Americans and Europeans still put a disproportionate amount of money into their native country's stock market. They would do better to divide their risks among more parties.

 

Paragraph G. While more data can only assist in decision-making, Kahneman argues that people spend disproportionately more time on little choices and too little on major ones. They ought to readjust the proportions. Some businesses during the boom years spent as much time organising an office party as they did contemplating a merger.

 

Paragraph H. Finally, lamenting the past isn't just a waste of time; it can also distort one's view of the future. Some people who invest in the stock market make too many trades each day in an attempt to catch up to the gains they would have made had they purchased the stock at an earlier date.

 

Paragraph I. Kahneman believes that certain industries are naturally more adept at handling uncertainty than others. Drug discovery programmes at pharmaceutical companies typically result in a large number of failures before a small number of major breakthroughs, therefore these organisations tend to be fairly risk-averse. But, he claims that financial institutions still have ways to go. While they are willing to take chances on a few large loans, they are exceedingly cautious when lending to small businesses, despite the fact that these enterprises often pose less of a risk. There are ramifications for governing bodies as well as citizens from this study. They are subjected to a plethora of political pressures, many of which are at odds with one another, increasing the likelihood that they would make illogical choices.

 

Let’s explore the questions and answers of Why Risks Can Go Wrong reading answer passage.

2.

Why Risks Can Go Wrong Reading Answers with Sample Questions

Have you read the passage? Now, take the test and find Why Risks Can Go Wrong Reading answers! Try to answer these questions by yourself before you sneak a peek at the answers given below.

Questions and Answers 1-6
  • Why Risks Can Go Wrong Reading Answer Passage has nine paragraphs A-I.
  • Choose the correct heading for Paragraphs B and D-H from the list of headings below.
  • Write the correct number i-xi in boxes 1-6 on your answer sheet.

 

List of headings

I. Enhancing one's inner resources

II. Failing to establish the correct priorities

III. A solution with a long-term perspective

IV. The difficulty of reversing a decision

V. Reluctance to venture beyond the familiar

VI. Enhancing one's inner resources

VII. An effective method for the study of decision-making

VIII. The risk of relying on a global market

IX. The need for more efficient risk evaluation

X. Underestimating the upcoming problems

XI. The power of the initial number

XII. Why looking back is detrimental

 

1. Paragraph B

2. Paragraph D

3. Paragraph E

4. Paragraph F

5. Paragraph G

6. Paragraph H
 

Why Risks Can Go Wrong  Reading Answers with Explanations (1-6)
 

Type of question: Matching Headings

 

In this question type, you will be asked to choose the correct heading for each paragraph from a list of headings provided. This type of question assesses your ability to understand the main idea or theme of each paragraph.

 

How to best answer: 

 

  • Familiarise yourself with the list of headings before reading the paragraphs. This helps you know what to look for.
  • Identify the main idea or theme of each paragraph by looking for topic sentences or recurring themes.
  • Find keywords or phrases that are similar to those in the headings. This can help you make connections.
  • Eliminate incorrect options that don't match any paragraphs to narrow down your choices.
  • Skim and Scan each paragraph efficiently to get a context about the content.

 

1. VI - Enhancing one's inner resources

 

Reference: From Paragraph B: “The idea of using psychological insights in economics and business decisions was met with some scepticism when Kahneman and his colleagues first began their study. However, the subfields of behavioural finance and economics have flourished during the past decade, and in 2002, Kahneman shared the Nobel Prize in economics.”

 

Explanation: This line indicates that Kahneman's research introduced a psychological approach to decision-making in economics and business. Although initially met with scepticism, it later became widely accepted and recognised, making "VI" the correct answer.

 

2. IX - The need for more efficient risk evaluation

 

Reference: From Paragraph D: “Mentioning a person gives that person an eerie power on the human psyche.”

 

Explanation: This line highlights the "anchor effect," where an initial number or statement significantly influences people's decisions. It shows how individuals rely on a given figure rather than evaluating risks properly, making "IX" the correct answer.

 

3. III - A solution with a long-term perspective

 

Reference: From Paragraph E: “It's never easy to give up on a long-held conviction, and the longer you wait after making a decision, the more ingrained that decision becomes.”

 

Explanation: This line explains that once people commit to a decision, they find it increasingly difficult to change their stance. It emphasises how stubbornness can lead to poor choices, supporting "III" as the correct answer.

 

4. VIII - The risk of relying on a global market

 

Reference: From Paragraph F: “Personal experience is also heavily weighted in people's decision-making, even though it may not be the best indicator of truth.”

 

Explanation: This line suggests that individuals often rely on personal experiences when making decisions, even if such experiences are not always accurate. It highlights the tendency to favour familiar information, making "VIII" the correct answer.

 

5. I - Enhancing one's inner resources

 

Reference: From Paragraph G: “Kahneman argues that people spend disproportionately more time on little choices and too little on major ones.”

 

Explanation: This line states that people allocate excessive time to minor decisions while neglecting more significant ones. It emphasises the need to balance priorities effectively, making "I" the correct answer.

 

6. XI - The power of the initial number

 

Reference: From Paragraph H: “Finally, lamenting the past isn't just a waste of time; it can also distort one's view of the future.”

 

Explanation: This line indicates that constantly dwelling on past mistakes can negatively influence future decisions. It highlights how regret can cloud judgment, making "XI" the correct answer.

 

Also Read: IELTS Reading Band Score 2025

Questions and Answers 7-10
  • Choose the correct answer A, B, C or D.
  • Write your answers in boxes 7-10 on your answer sheet.

 

7. People first found Kahneman's work peculiar since he 

A. saw mistakes as following predictable patterns.

B. was unaware of behavioural approaches.

C. dealt with irrational types of practice.

D. Applied psychology to finance and economics.

 

8. The author cites homeowners' perspectives on the value of their homes to demonstrate that

A. Past failures may destroy an optimistic attitude.

B. People tend to exaggerate their chances of success.

C. Optimism may be justified in certain circumstances.

D. People are influenced by the success of others.
 

9. Obstinate and inflexible may create complications when people 

A. Think their financial difficulties are just due to bad luck.

B. Avoid seeking advice from experts and analysts.

C. Refuse to invest in the early stages of a project.

D. Are unwilling to give up unsuccessful activities or beliefs.
 

10. Why do so many Americans and Europeans fail to diversify their investment risks?

A. They feel safer dealing in a context which is close to home.

B. They do not understand the benefits of diversification.

C. They are over-influenced by the successes of their relatives.

D. They do not have sufficient knowledge of one another’s countries.
 

Why Risks Can Go Wrong  Reading Answers With Explanations (7-10)
 

Type of question: Multiple choice questions

 

In this question type, you are asked to answer the question followed by several options, typically lettered A, B, C, or D. The task is to select the correct answer from the given choices based on the information provided in the reading passage.

 

How to best answer: 
 

  • Read the question carefully and understand what it asks.
  • Pay attention to the keywords in the question.
  • Skim the passage quickly to locate relevant information.
  • Eliminate the clearly incorrect options.
  • Select the answer that best fits the information in the passage.

 

7. D - Applied psychology to finance and economics

 

Reference: From Paragraph B: “The idea of using psychological insights in economics and business decisions was met with some scepticism when Kahneman and his colleagues first began their study. However, the subfields of behavioural finance and economics have flourished during the past decade, and in 2002, Kahneman shared the Nobel Prize in economics.”

 

Explanation: This line indicates that Kahneman's work was initially considered peculiar because he applied psychological insights to finance and economics, which was met with scepticism. This makes "applied psychology to finance and economics" the correct answer.

 

8. B - People tend to exaggerate their chances of success

 

Reference: From Paragraph C: “In spite of evidence to the contrary, most individuals will continue to see nothing but sunshine if you ask them about the future.”

 

Explanation: This line indicates that people tend to remain overly optimistic about the future, even when evidence suggests otherwise. This exaggeration of their chances of success makes "people tend to exaggerate their chances of success" the correct answer.

 

9. D - Are unwilling to give up unsuccessful activities or beliefs

 

Reference: From Paragraph D: “Companies in the pharmaceutical industry must make the tough call of terminating an unsuccessful research project before too much money is wasted. Similarly, experts' early commitment to a single theory may have skewed their perspective. New eyes are always welcome.”

 

Explanation: This line indicates that reluctance to abandon unsuccessful projects or beliefs can lead to poor decision-making. The unwillingness to let go of failing efforts makes "are unwilling to give up unsuccessful activities or beliefs" the correct answer.

 

10. A - They feel safer dealing in a context which is close to home

 

Reference: From Paragraph F: “ While most people are aware that diversifying one's holdings is a good idea, the majority of Americans and Europeans still put a disproportionate amount of money into their native country's stock market. They would do better to divide their risks among more parties.”

 

Explanation: This line indicates that despite understanding the benefits of diversification, people prefer investing in familiar markets within their home countries. Their preference for a familiar financial environment makes "they feel safer dealing in a context which is close to home" is the correct answer.

 

To build a strong word bank that can help you approach the Reading section with clarity and confidence, go through the IELTS Academic Reading 2025!

Questions and Answers 11-13
  • Answer the questions below, using NO MORE THAN THREE WORDS for each answer.
  • Write your answers in boxes 11-13 on your answer sheet.

 

11. Which two professions may profit from excessive optimism?

12.  In which practical skill are most people overconfident?

13. Which business has an usually positive attitude toward dealing with uncertainty?

 

Why Risks Can Go Wrong Reading Answers With Explanations (11-13)

 

Type of question: Short answer 

 

In this task, you will be given a set of questions with missing information, typically sentences with blank spaces. You must complete each statement with one word or phrase (as instructed). 

 

How to best answer: 

 

  • Read the questions first to understand what information you need to look for in the passage.
  • Skim the passage and look for keywords. 
  • You may have to look for synonyms or paraphrases to locate the answer. 
  • Verify your answers and finalise them.

 

11. Managers (and/or) sportsperson

 

Reference: From Paragraph C: “Managers and athletes alike can benefit from this kind of confidence, which can occasionally become a self-fulfilling prophecy.”

 

Explanation: This line suggests that managers and athletes can gain advantages from excessive optimism, as their confidence can sometimes lead to positive outcomes. This makes "managers (and/or) sportsperson" the correct answer.

 

12. Driving

 

Reference: From Paragraph C: “To begin, the majority of people overestimate their own abilities; for example, in surveys, a lot less than half of people think they are below-average drivers.”

 

Explanation:  This line highlights that most individuals believe they are better drivers than they actually are, indicating overconfidence in their driving skills. Therefore, "driving" is the correct answer.

 

13. Pharmaceutical (companies)

 

Reference: From Paragraph I: “Kahneman believes that certain industries are naturally more adept at handling uncertainty than others. Drug-discovery programmes at pharmaceutical companies typically result in a large number of failures before a small number of major breakthroughs, therefore, these organisations tend to be fairly risk-averse.”

 

Explanation: This line shows that pharmaceutical companies frequently deal with uncertainty due to the unpredictable nature of drug discovery. Their ability to handle risks better than other industries makes "pharmaceutical (companies)" the correct answer.

 

To build a strong word bank that can help you approach the Reading section with clarity and confidence, go through the IELTS Academic Reading 2025!
3.

Check Out Top 40+ IELTS Reading Practice Test Questions with Answers

Below are some top 40+ free IELTS Reading Practice test online questions with detailed answers to enhance your IELTS preparation online. We have provided sample passages for each test type for your reference.
 

ielts logo

Get the IELTS Prep App

Star rating icon

4.2

1M+ Installs

 app download banner image

Get the app link on your phone

+91

Or download app from

google play storeapp store

Next Up

IELTS Reading Practice Test
IELTS Practice Test
IELTS Cue Card
IELTS Writing Task 2
IELTS Writing Task 1
IELTS Listening Practice Test

IELTS Important Information

IELTS ExamIELTS Exam DateIELTS Exam FeeIELTS ModulesIELTS Listening Practice TestIELTS Speaking Practice TestIELTS Reading Practice TestIELTS Writing Practice TestIELTS Test CentresIELTS ResultsTypes of IELTSIELTS PatternIELTS Exam EligibiltyIELTS Slot BookingIELTS Band ScoreIELTS RegistrationIELTS BooksIELTS PreparationIELTS Practice Test

IELTS Accepting Countries

Study In USAStudy In CanadaStudy In UKStudy In AustraliaStudy In IrelandStudy in GermanyStudy In New ZealandStudy in ItalyStudy in France

IELTS Accepting Universities

Massachusetts Institute Of TechnologyThe University Of British ColumbiaHarvard UniversityUniversity Of TorontoConestoga CollegeUniversity Of East LondonStanford UniversityUniversity Of AlbertaCoventry UniversityNew York University

Read More about IELTS Practice Test

IELTS Speaking Practice TestIELTS Writing Practice TestIELTS Reading Practice TestIELTS Listening Practice TestIELTS Speaking Cue CardIELTS Speaking Part 1IELTS Writing Task 1IELTS Writing Task 2Task 1 Pie ChartTask 1 Table ChartTask 1 MapTask 1 Bar GraphTask 1 Line GraphTask 1 Diagram

Top Reading Samples with Answers

Comet Missions Reading AnswersGlaciers Reading AnswersGraffiti Reading AnswersTasmanian Tiger Reading AnswersThe Ring Tailed Lemur Reading AnswersSleep Reading AnswersDyslexia Reading AnswersPoverty and Health Reading AnswersStealth Forces in Weight Loss Reading AnswersThe Types of Pearls Reading AnswersCaffeine Reading AnswersWhy We Need to Protect Polar Bears Reading Answers

IELTS Test Centre and Dates in India

IELTS Test Centre and Dates in HyderabadIELTS Test Centre and Dates in BangaloreIELTS Test Centre and Dates in ChennaiIELTS Test Centre and Dates in AmritsarIELTS Centre and Dates in LudhianaIELTS Test Centre and Dates in MumbaiIELTS Test Centres and Dates in AhmedabadIELTS Centre and Dates in DelhiIELTS Test Centres and Dates in ChandigarhIELTS Center and Dates in Pune
Related videos

Related Articles

Related read

Urban Planning In Singapore Reading Answers

Related read

The Pursuit Of Knowledge Reading Answers

Related read

Talking Point Reading Answers

FAQs

Q. What are common keywords in Why Risks Can Go Wrong Reading passage?

Ans. Common keywords include risk assessment, decision-making, uncertainty, psychological bias, probability, overconfidence, and failure analysis. These words help identify key ideas in the passage and locate relevant information for answering questions.

Q. How to answer matching headings questions in Why Risks Can Go Wrong reading passage?

Ans. Read the headings first and underline keywords. Then, skim each paragraph to understand the main idea. Match the heading that best summarises the paragraph’s content. Look for synonyms and paraphrased ideas instead of exact words.

Q. What is a challenging aspect of Why Risks Can Go Wrong Reading passage?

Ans. The passage includes complex vocabulary related to risk assessment and psychology, making it difficult to grasp quickly. Additionally, distinguishing between different factors contributing to risk misjudgment can be challenging for some test-takers.

Q. Are Why Risks Can Go Wrong passages part of the IELTS Academic or General Reading?

Ans. This passage is typically found in the IELTS Academic Reading test, as it deals with an analytical topic requiring critical thinking and a deeper understanding of risk-related theories.

Q. How can I improve my reading speed for the IELTS Reading test?

Ans. Practise skimming and scanning techniques to locate key information quickly. Read newspapers and academic articles daily to build reading stamina. Avoid reading every word—focus on understanding the main ideas and keywords.

Q. Can I use a dictionary during the IELTS Reading test?

Ans. No, dictionaries are not allowed during the test. You must rely on context clues and word structure to understand unfamiliar words. Regular vocabulary practice can help improve comprehension.

Q. What strategies can help me answer True/False/Not Given questions?

Ans. Read the statement carefully and find the relevant part of the passage. If the information matches, it's True; if it contradicts, it's False; if it's missing, it's Not Given. Avoid making assumptions beyond the text.

Q. How can I handle unknown words in the reading passages?

Ans. Use context clues to guess the meaning of unfamiliar words. Look at surrounding words and sentence structure for hints. Break complex words into root words or prefixes to understand their meaning.

Q. Is it necessary to answer the questions in order?

Ans. No, you can skip difficult questions and return to them later. Prioritise easier questions first to save time. However, in most cases, the answers follow the order of the passage.

Q. What should I do if I run out of time?

Ans. Focus on answering the remaining questions quickly. Use educated guesses if needed, as there is no penalty for incorrect answers. Ensure all answer spaces are filled before time runs out.

Q. How can I practice effectively for the IELTS Reading test?

Ans. Take timed practice tests regularly to simulate exam conditions. Analyse mistakes to understand weak areas. Read a variety of texts, including academic journals and newspapers, to improve comprehension skills.