A risk-return indifference curve shows combinations of increasingly risky investments with decreasing rates of return that are equally attractive to an investor.

Question

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A risk-return indifference curve shows combinations of investments with varying levels of risk and return, but they are not necessarily equally attractive to an investor. The curve represents the trade-off between risk and return, and an investor may prefer one point on the curve over another depending on their individual preferences and risk tolerance.

A Risk-Return Indifference Curve Shows Combinations of Increasingly Risky Investments