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An Investor Who Is Risk-Neutral

Question 2

Multiple Choice

An investor who is risk-neutral


A) would prefer to invest in only risk-free assets.
B) would be indifferent between investing her money in a savings account at 4% or investing in a bond that has a 50% chance of returning 8% and a 50% chance of returning 0%.
C) will take any fair bet.
D) Both B and C are true.

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