When Considering Different Investments, a Risk-Averse Investor Is Most Likely

question 45

Multiple Choice

When considering different investments, a risk-averse investor is most likely to focus on purchasing:

• A) investments with the greatest spread in the expected rate of return.
• B) investments that offer the lowest standard deviation in the investments' expected rates of return for any given expected rate of return.
• C) only risk-free investments.
• D) investments with the lowest risk premium, regardless of the expected rate of return.

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Definitions:

Short-Term Memory

The part of the memory system where information is stored for a short duration, typically seconds to minutes.

Henry Molaison (H.M.)

A patient who became an important case study in the understanding of memory after undergoing a surgical procedure that left him with severe anterograde amnesia.

Explicit Memories

Memories that can be consciously recalled, such as facts and events, and are part of the declarative memory system.

Long-Term Memory (LTM)

In the three-box model of memory, the memory system involved in the long-term storage of information.