People Who Are Risk Averse

question 80

Multiple Choice

People who are risk averse

• A) value a collection of assets only on the basis of its expected returns.
• B) value a collection of assets only on the basis of the risk of that return.
• C) value a collection of assets not only on the basis of its expected returns but also on the basis of the risk of that return.
• D) are less likely to invest in life insurance.
• E) are less likely to have a diverse portfolio.

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Definitions:

Chapter 7

A provision of U.S. bankruptcy law under which an individual or business liquidates assets to pay off debts under the guidance of a court-appointed trustee.

Trustee

Someone legally appointed to manage and administer property or assets for the benefit of another, often used in contexts like bankruptcy, trust funds, and estates.

IRA

An Individual Retirement Account, a financial tool designed to help individuals save for retirement with tax advantages.

Voluntary

An action undertaken by one's own free will without external coercion or undue influence.