The correct answer is **It is better to accept a small loss than to lose everything.** (Option 3). **Comprehensive Derivation:** The correct answer is "It is better to accept a small loss than to lose everything.". Explanation & Key Takeaways: • The proverb "Better lose the saddle than the horse" means it's advisable to accept a small loss in order to prevent a larger one. • The horse is more valuable than the saddle in the proverb. • If you lose the horse, the saddle has no use. • Therefore, it's better to lose the saddle (a smaller loss) to ensure the horse (a larger value) is not lost. • For Example - When Mike sold his cherished car to pay off his debts, he realized it's "better lose the saddle than the horse." Therefore, the correct answer is "Option 3". **Option Elimination:** • **Option 1 (It is better to deal with something difficult but familiar.)**: Incorrect distractor. • **Option 2 (It is better to avoid disputes with fools.)**: Incorrect distractor. • **Option 3 (It is better to accept a small loss than to lose everything.)**: Correct Answer; accurate according to canonical reference. • **Option 4 (It is better to do something late than not do it at all.)**: Incorrect distractor. **Exam Trap:** Be careful of misleading distractors and subtle terminology differences. Verify core properties before selecting your answer. **Memory Booster:** Core mnemonic rule: It is better to accept a small loss than to lose everything. corresponds to Option (3).