Which One of the Following Statements Is FALSE

question 48

Multiple Choice

Which one of the following statements is FALSE?

• A)When we compute the return of a security based on the average payoff we expect to receive,we call it the expected return.
• B)The notion that investors prefer to have a safe income rather than a risky one of the same average amount is call risk aversion.
• C)Because investors are risk averse,the risk-free interest rate is not the right rate to use when converting risky cash flows across time.
• D)The more risk averse investors are,the higher the current price of a risky asset will be compared to a risk-free bond.

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Definitions:

Copper

A chemical element with the symbol Cu and atomic number 29, known for its high thermal and electrical conductivity, used in electrical equipment, construction, and various alloys.

Maturity Date

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and is to be paid in full.

Open Interest

Open Interest reflects the total number of outstanding derivative contracts, such as options or futures, that have not been settled.

October Futures Contract

An agreement to buy or sell an asset at a predetermined price at a specified time in October.