Which One of the Following Statements Is FALSE

question 83

Multiple Choice

Which one of the following statements is FALSE?

• A)When we compute the return of a security based on the average payoff we expect to receive,we call it the expected return.
• B)The notion that investors prefer to have a safe income rather than a risky one of the same average amount is called risk aversion.
• C)Because investors are risk averse,the risk-free interest rate is not the right rate to use when converting risky cash flows across time.
• D)The more risk averse investors are,the higher the current price of a risky asset will be compared to a risk-free bond.

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Definitions:

Equipment

Equipment consists of the tools, machinery, and other durable assets used by a business to carry out its operations.

Cash

Money in the form of currency, including coins and banknotes, which is used as a medium of exchange and legal tender.

Equally

In a manner that showcases uniformity or parity in distribution, value, or measure among all parties or elements involved.

Individually Liable

A legal concept where an individual is personally responsible for fulfilling the obligations of a contract or debt.