Portfolio Theory Assumes That Investors Are Risk-Averse

question 83

Multiple Choice

Portfolio theory assumes that investors are risk-averse. This means that investors:

• A) cannot be induced to make risky investments.
• B) prefer more risk to less for a given return.
• C) will accept some risk, but not unnecessary risk.
• D) All of the above are true.

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Definitions:

Newborn

A newborn refers to an infant in the first few hours to weeks of life, typically up to 28 days old.

Fetal Alcohol Syndrome

A condition in a child that results from alcohol exposure during the mother's pregnancy, causing brain damage and growth problems.

Offspring

The children or young born to a person, animal, or plant.

Maturation

Biological growth processes that enable orderly changes in behavior, relatively uninfluenced by experience.