If a Person's Required Return Decreases for an Increase in Risk

question 174

Multiple Choice

If a person's required return decreases for an increase in risk, that person is said to be

• A) risk-seeking.
• B) risk-indifferent.
• C) risk-averse.
• D) risk-aware.

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Definitions:

Negligent Misrepresentation

A false statement made carelessly that induces another party to enter into a contract, resulting in harm or damage.

Reasonable Care

A legal standard requiring individuals or organizations to act with the level of caution and vigilance that a prudent person would under similar circumstances, to prevent harm to others.

Scienter

Intent or knowledge.

Innocent Misrepresentation

A false statement about a fact material to an agreement that the person who made the statement believed to be true.