Which of the Following Properties Can Be Associated with an Indifference

question 32

Multiple Choice

Which of the following properties can be associated with an indifference curve of a risk-averse investor?

• A)Indifference curve for a risk-averse investor is a vertical line parallel to the variance axis.
• B)Two indifference curves can intersect at the equilibrium combination of risk and return.
• C)An indifference curve closer to the expected return axis gives a better utility than the one farther away.
• D)Indifference curve for a risk-averse investor is always downward sloping.

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Definitions:

Nurture

The influence of environmental factors and experiences on the development of an individual's physical and psychological attributes.

Discontinuities

Breaks or disruptions in a normally continuous process or sequence, leading to sudden changes rather than gradual developments.

Nature

The collective term for the physical aspects of the earth, including flora, fauna, geographical features, and natural occurrences, distinct from human-made elements or inventions.

Passive

Accepting or allowing what happens or what others do, without active response or resistance.