A Investor That Is Given a Choice Between Two Investments

question 34

Multiple Choice

A investor that is given a choice between two investments with the same expected return and who always prefers the riskier 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:

Codeine

An opiate used to treat pain, as a cough suppressant, or occasionally in the treatment of diarrhea.

Neurotransmission

The process by which nerve cells (neurons) communicate with each other through the exchange of chemical messengers called neurotransmitters.

Amplitude

The height of a wave crest, used (in the case of sound waves) as a measure of sound intensity.

Hertz

The unit of frequency in the International System of Units (SI), representing one cycle per second.