"Risk Aversion" Implies That Investors Require Higher Expected Returns on Riskier

question 139

True/False

"Risk aversion" implies that investors require higher expected returns on riskier than on less risky securities.

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Definitions:

Bounce Back

The ability to recover from setbacks or difficulties; resilience.

Inverted-U Hypothesis

A theory suggesting that performance increases with physiological or mental arousal, but only up to a point, after which performance begins to decrease.

Level of Arousal

The degree of alertness, wakefulness, or responsiveness of an organism.

Performance

The act of carrying out a task, the effectiveness of which can be measured in terms of quality, speed, and efficiency.