Categorize the Following People in Relation to Risk

question 22

Essay

Categorize the following people in relation to risk:
Person 1: Given two investments with different levels of riskiness, considers only the expected return from each investment
Person 2: Given two investments with the same return and different levels of risk, chooses the less risky investment
Person 3: Given two investments, more likely to invest in a new, unknown company over investing in a well-known and trusted company

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Definitions:

Swap Market

A market in which individuals, businesses, and institutions exchange financial instruments, like interest rates or currencies.

Fixed Rate

An interest rate that remains constant over the life of a loan or investment.

Portfolio's Beta

A measurement of the volatility or systematic risk of a portfolio in comparison to the market as a whole.

S&P500 Value

The total market value of all stocks listed in the S&P 500 index, reflecting the performance of 500 large companies listed on stock exchanges in the United States.