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.

---

Definitions:

Successful

Characterized by achieving desired aims or attaining prosperity, often measured by specific goals, wealth, honor, or the like.

Homeostatic/Medical Approach

An approach focusing on maintaining balance and well-being in the body or environment, often applied in medical contexts to describe how the body regulates its internal environment.

Deep Emotions

Intense, often powerful feelings that have significant depth and complexity, reflecting emotional states that are profound and deeply rooted.

Environmental Demands

The requirements or pressures exerted by the surrounding environment on individuals or organizations.