Which of the Following Investments Would a Risk-Averse Investor Prefer

question 9

Multiple Choice

Which of the following investments would a risk-averse investor prefer if the risk-free rate is zero?

• A) I only
• B) II only
• C) III only
• D) I and III only

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Definitions:

Agents

Individuals or entities authorized to act on behalf of another, typically in business transactions.

Agency Relationship

A legal relationship in which one party, the agent, is authorized to act on behalf of another, the principal, in business transactions with third parties.

Independent Contractor

An individual or entity contracted to perform work for another entity as a non-employee, retaining control over how the work is completed.

Employee And Agent

Individuals who perform work for another person or entity under an agreement where the employer has the right to control the details of work performance.