The Markowitz model assumes that investors are "risk averse", which means that they:
A) will not take a "fair gamble."
B) will take a "fair gamble."
C) will take a "fair gamble" fifty percent of the time.
D) will never assume investment risk.

Question

Quizplus · Accepted Answer

Risk-averse investors prefer to avoid risk and will not take a "fair gamble," which is a gamble with an expected value of zero, as they prefer certainty over uncertainty.

The Markowitz Model Assumes That Investors Are "Risk Averse", Which