Portfolio Theory Assumes That Investors Are Risk-Averse

question 83

Multiple Choice

Portfolio theory assumes that investors are risk-averse. This means that investors:

• A) cannot be induced to make risky investments.
• B) prefer more risk to less for a given return.
• C) will accept some risk, but not unnecessary risk.
• D) All of the above are true.

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Definitions:

Jurors

Members of a trial jury who are charged with the responsibility of deciding whether a defendant is guilty or not guilty based on the evidence presented during a court trial.

Asch's Studies

A series of experiments conducted by Solomon Asch that demonstrated the impact of group pressure on conformity.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.

Objective Right

A principle or standard of behavior that is universally accepted as correct or moral, independent of individual thought or opinion.