A Investor That Is Given a Choice Between Two Investments

question 24

Multiple Choice

A investor that is given a choice between two investments with the same expected return and who always prefers the less risky one is said to be:

• A) risk-averse.
• B) a risk seeker.
• C) risk-neutral.
• D) risk indifferent.
• E) risk efficient.

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Definitions:

Compensation Scheme

The structure of various types of pay and benefits that employees receive for their work, including salary, bonuses, and non-monetary perks.

Monitor Outcomes

The process of tracking and reviewing the results of actions or decisions in order to assess performance, effectiveness, or quality.

Incentive Compensation

A form of payment designed to reward employees for achieving a certain goal, improving performance, or exhibiting a desired behavior.

Performance Measures

Metrics or indicators used to gauge the effectiveness, productivity, or success of an organization or individual’s activities.