Someone Who Is Risk Averse Has a General Dislike for Risk

question 12

True/False

Someone who is risk averse has a general dislike for risk and a preference for certainty.If risk aversion exists in the market, then investors in general are willing to accept somewhat lower returns on less risky securities.Different investors have different degrees of risk aversion, and the end result is that investors with greater risk aversion tend to hold securities with lower risk (and therefore a lower expected return) than investors who have more tolerance for risk.

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Definitions:

Demands And Constraints

Demands and constraints refer to the challenges and limitations respectively that individuals or organizations face in the pursuit of their goals.

Objective Job Conditions

Pertains to the tangible, measurable aspects of a job environment, such as working hours, physical environment, and job responsibilities.

Leader's Objectives

The goals or targets set by a leader or manager that guide the direction and actions of a team or organization.

Situational Variables

These are factors that influence behaviors and outcomes in certain situations, highlighting the impact of the external environment on decision-making.