Assume That an Investor Is Offered a Choice of a Risk-Free

question 95

Multiple Choice

Assume that an investor is offered a choice of a risk-free government bond or a high-risk corporate stock.Further assume that the expected return is the same for both.According to one of the axioms of finance,which investment would be chosen?

• A) the corporate stock
• B) the government bond
• C) neither, the investor would be indifferent
• D) none of the above

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