In a Return-Standard Deviation Space, Which of the Following Statements

question 32

Multiple Choice

In a return-standard deviation space, which of the following statements is(are) true for risk-averse investors? (The vertical and horizontal lines are referred to as the expected return-axis and the standard deviation-axis, respectively.) I) An investor's own indifference curves might intersect.II) Indifference curves have negative slopes.III) In a set of indifference curves, the highest offers the greatest utility.IV) Indifference curves of two investors might intersect.

• A) I and II only
• B) II and III only
• C) I and IV only
• D) III and IV only
• E) None of the options are correct.

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Definitions:

Decentralization

The distribution of decision-making powers away from a central authority to lower or local levels of an organization, government, or entity.

Operative Costs

Expenses associated with the day-to-day operations of a business, including salaries, rent, and utilities.

Franchise

A type of license that a party (franchisee) acquires to allow them to have access to a business's (franchisor) proprietary knowledge, processes, and trademarks to sell a product or provide a service under the business's name.

Cost Price Approach

A pricing method that determines the selling price of a product by adding a profit margin to the total cost of production.