Portfolio Theory Assumes That Investors Are Risk-Averse

question 83

Multiple Choice

Portfolio theory assumes that investors are risk-averse. This means that investors:

• A) cannot be induced to make risky investments.
• B) prefer more risk to less for a given return.
• C) will accept some risk, but not unnecessary risk.
• D) All of the above are true.

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Definitions:

Congress

The United States' legislative authority, which is divided into the Senate and the House of Representatives.

Sedition Act

Historical laws enacted by governments to prevent dissent against authority, typically covering actions such as speaking, writing, or organizing against the government.

Americanization

A cultural assimilation process by which people or groups adopt American attributes, including customs, culture, and language.

W. T. Stead

An influential British journalist and editor known for his pioneering work in investigative journalism and his advocacy for social reform in the late 19th and early 20th centuries.