The Concept of Being Risk Averse Means

question 42

Multiple Choice

The concept of being risk averse means:

• A) for a given situation investors would prefer relative uncertainty to certainty.
• B) investors would prefer investments with high standard deviations and greater opportunity for gain.
• C) that the higher the risk the lower the expected return must be.
• D) investors prefer low risk to high risk investments.

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Definitions:

Dependent Variable

The outcome variable in an experiment or study that is being tested and measured, believed to be affected by the independent variable(s).

Regression Model

A statistical approach for estimating the relationships among variables, often one dependent variable and one or more independent variables.

Predict

The act of making educated guesses about the future based on current or past data, often an essential part of statistical analysis and planning.

Variable

An element, feature, or factor that is liable to vary or change.