The Concept of Risk Aversion from Portfolio Theory, Applies to Capital

question 93

True/False

The concept of risk aversion from portfolio theory, applies to capital budgeting because firms prefer to undertake less risky as opposed to more risky projects.

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Definitions:

Evolutionary Psychology

The field of research exploring how evolution shaped human psychology.

Neuroticism

A personality trait involving a long-term tendency to be in a negative emotional state. People high in neuroticism are more likely to experience feelings of anxiety, sadness, and moodiness.

Agreeableness

A personality trait characterized by kindness, empathy, trustworthiness, and cooperation.