Which of the Following Is Not Correct

question 10

Multiple Choice

Which of the following is not correct?

• A)The higher average return on stocks than on bonds comes at the price of higher risk.
• B)Risk-averse persons will take the risks involved in holding stocks if the average return is high enough to compensate for the risk.
• C)Insurance markets reduce risk,but not by diversification.
• D)Risk can be reduced by placing a large number of small bets,rather than a small number of large bets.

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Definitions:

Research and Development

Activities undertaken by a company to innovate and introduce new products or services, or to improve existing ones, often involving considerable investment and risk.

R&D Expenditures

Costs incurred in the research and development of new products or services, aiming to improve or innovate offerings.

Investors

individuals or institutions that allocate capital with the expectation of receiving financial returns, often by purchasing stocks, bonds, or other investment vehicles.

Software Development Costs

The costs associated with the development, design, and implementation of software, which may be capitalized or expensed depending on their nature and benefit period.