An Investor with Low Risk Aversion Will Likely Prefer Which

question 6

Multiple Choice

An investor with low risk aversion will likely prefer which of the following risk and return combinations?

• A) expected return = 11%, historical standard deviation = 12%
• B) expected return = 12%, historical standard deviation = 14%
• C) expected return = 14%, historical standard deviation = 18%
• D) expected return = 17%, historical standard deviation = 21%

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Definitions:

Muscular Wall

Structure composed of muscle tissue that makes up part of the body's organs, such as the stomach or heart, enabling movement and function.

Impulse

A sudden desire to act or a neural signal transmitted through the nervous system.

Ventricles

Chambers within the heart or brain that have specific functions, such as pumping blood in the case of the heart or storing cerebrospinal fluid in the case of the brain.

Circuit

An electrical circuit is a path in which electrons from a voltage or current source flow.