Steve Is More Risk-Averse Than Edie

question 45

Multiple Choice

Steve is more risk-averse than Edie.On a graph that shows Steve's and Edie's indifference curves,which of the following is true? Assume that the graph shows expected return on the vertical axis and standard deviation on the horizontal axis.
I.Steve and Edie's indifference curves might intersect.
II.Steve's indifference curves will have flatter slopes than Edie's.
III.Steve's indifference curves will have steeper slopes than Edie's.
IV.Steve and Edie's indifference curves will not intersect.
V.Steve's indifference curves will be downward sloping and Edie's will be upward sloping.

• A) I and V
• B) I and III
• C) III and IV
• D) I and II
• E) II and IV

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