The Principle of Risk Aversion Can Best Be Described As

question 57

Multiple Choice

The principle of risk aversion can best be described as:

• A)the observation that investors are unwilling to acquire very risky securities regardless of their risk premiums.
• B)the hypothesis that people always prefer investments with less risk to those with more risk if the expected returns are equal.
• C)the observation that risky securities usually offer unattractive expected returns when the possibility of loss is considered.
• D)All of the above

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Definitions:

Stereoscopic Vision

A type of vision that provides depth perception due to the slightly different views each eye has of the same object.

Opposable Thumb

A thumb that can be moved into position to touch the fingers, enabling grasping and manipulation of objects.

Primates

An order of mammals that includes humans, apes, monkeys, and prosimians, characterized by large brains, forward-facing eyes, and opposable thumbs.

Australopithecus Afarensis

An extinct hominin species known for the famous fossil "Lucy," significant for understanding early human evolution.