Joe,a Risk-Averse Investor,is Trying to Choose Between Investment a and Investment

question 141

Multiple Choice

Joe,a risk-averse investor,is trying to choose between investment A and investment B.If investment A is riskier than investment B and Joe selects investment A anyway,then

• A) the actual return for investment A will be higher than the actual return for investment B.
• B) the actual return for investment A will be higher than the expected return for investment B.
• C) the expected return for investment A will be higher than the actual return for investment B.
• D) the expected return for investment A will be higher than the expected return for investment B.

---

Definitions:

Perfect Competitor

A firm that operates in a perfectly competitive market, characterized by selling a homogenous product and having no control over the market price.

Output

In economics, output refers to the total amount of goods and services produced by an economic system or entity.

Imperfect Competitor

An entity in a market that cannot dictate the prices of its goods or services due to the presence of competition, contrary to a monopoly.

Regional

Pertaining to or characteristic of a specific geographic area or division, often considered in terms of economic, political, or cultural distinctions.