Which Three Following Statements Are Correct

question 26

Multiple Choice

Which three following statements are correct?

• A) Risk averters prefer a more certain return to an alternative with an equal but more risky expected outcome.
• B) Most investors in shares are risk averters.
• C) Risk averters demonstrate diminishing marginal utility.
• D) Risk averters expect companies to behave as risk lovers.

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Definitions:

Good Policy

A set of principles or guidelines designed to achieve rational outcomes, often considered to be beneficial for the majority.

Bad Policy

Decision-making or guidelines that result in adverse outcomes or fail to achieve the intended objectives, often criticized for inefficiency or ineffectiveness.

Government Intervention

Actions taken by a government to influence or directly manage an economy, industry, or market, typically with the goal of correcting market failures or achieving social objectives.

Securities Taxes

Taxes levied on the earnings from stocks, bonds, or other investment assets.