Someone Who Is Risk Averse Has a General Dislike for Risk

question 12

True/False

Someone who is risk averse has a general dislike for risk and a preference for certainty.If risk aversion exists in the market, then investors in general are willing to accept somewhat lower returns on less risky securities.Different investors have different degrees of risk aversion, and the end result is that investors with greater risk aversion tend to hold securities with lower risk (and therefore a lower expected return) than investors who have more tolerance for risk.

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Definitions:

Deficit Syndrome

A concept often used in schizophrenia research, referring to a subset of symptoms characterized by severe impairment in emotional expressiveness and social functioning.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification system for mental disorders published by the American Psychiatric Association.

Assertive Community Treatment

An intensive and highly individualized mental health care approach, usually for people with severe and persistent mental health conditions, delivered by a multidisciplinary team.