Risk aversion is the behavior exhibited by managers who require a greater than proportional
A) decrease in return, for a given increase in risk.
B) increase in return, for a given increase in risk.
C) increase in return, for a given decrease in risk.
D) decrease in return, for a given decrease in risk.

Question

Quizplus · Accepted Answer

Risk-averse managers require a higher return to compensate for taking on additional risk, hence they seek a greater increase in return for a given increase in risk.

Risk Aversion Is the Behavior Exhibited by Managers Who Require