Which of the following describes the attribute of a risk neutral investor?
A) An investor that makes decisions based on the expected return and the degree of risk of assets.
B) An investor that makes decisions based on the credit rating of assets.
C) An investor that makes decisions based on the popularity of assets.
D) An investor that makes decisions based on the advice of financial planners.
E) An investor that makes decisions based on the expected return of assets.

Question

Quizplus · Accepted Answer

A risk neutral investor makes decisions based solely on the expected return of assets, without considering the degree of risk associated with those assets. Therefore, option E is the correct choice. Options A, B, C, and D all indicate that the investor considers factors other than expected return.

Which of the Following Describes the Attribute of a Risk