A Risk-Averse Investor Will

question 33

Multiple Choice

A risk-averse investor will:

• A) always accept a greater risk with a greater expected return.
• B) only invest in assets providing certain returns.
• C) never accept lower risk if it means accepting a lower expected return.
• D) sometimes accept a lower expected return if it means less risk.

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Definitions:

Circular Shareholdings

A corporate structure where companies hold shares in each other, creating a circular ownership loop.

Equity Interest

Ownership interest in a company, represented by holding the company's stock.

Sub-subsidiary

A company that is indirectly controlled by a parent company through another subsidiary, essentially being a 'grandchild' in the corporate family hierarchy.

Circular Shareholdings

A corporate structure where companies possess shares in one another in a closed loop, complicating the assessment of true economic ownership and control.