As Risk Aversion Increases

question 138

Multiple Choice

As risk aversion increases

• A) a firm's beta will increase.
• B) investors' required rate of return will increase.
• C) a firm's beta will decrease.
• D) investors' required rate of return will decrease.

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Definitions:

Affection

A feeling of fondness or love toward someone, which can manifest through physical or emotional expressions.

Sex

Refers to the biological characteristics that define humans as female or male; this can also extend to sexual activity involving the arousal, pleasure, and sometimes reproduction between individuals.

Mutual Understanding

A reciprocal recognition and acceptance of each other's feelings, thoughts, and communications often forming the basis of effective communication and relationships.

Integrity

The quality of being honest and having strong moral principles; moral uprightness.