An individual faces two alternatives for an investment. Asset 'A' has the following probability of return schedule:

Asset 'B' has a certain return of 10.25%. If this individual selects asset 'A' does it imply she is risk averse? Explain.

Question

An individual faces two alternatives for an investment. Asset 'A' has the following probability of return schedule:
  
Asset 'B' has a certain return of 10.25%. If this individual selects asset 'A' does it imply she is risk averse? Explain.

Quizplus · Accepted Answer

The Answer of An individual faces two alternatives for an investment. Asset 'A' has the following probability of return schedule:
  
Asset 'B' has a certain return of 10.25%. If this individual selects asset 'A' does it imply she is risk averse? Explain.

An Individual Faces Two Alternatives for an Investment