Steve Is More Risk-Averse Than Edie

question 35

Multiple Choice

Steve is more risk-averse than Edie. On a graph that shows Steve 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

---

Definitions:

Relative Frequency

The ratio of the number of times a particular value appears in a dataset to the total number of observations.

Categorical Data

Data that can be divided into groups or categories that are not numerically ordered.

Relative Data

Data that is compared to a certain reference point or to other data in order to assess its value or importance in relative terms.

Cumulative Data

Data that aggregates or accumulates over time, adding up as new data comes in to represent a total or sum.