Most investors exhibit risk averse behaviour which means:
A) they will not assume more risk only unless they are compensated by higher expected returns.
B) they will always invest in investments providing the lowest possible risk.
C) they actively seek to maximize their risks.
D) they invest only in money market securities to avoid the risk inherent in the stock market.

Question

Quizplus · Accepted Answer

Risk-averse investors require higher expected returns to compensate for taking on additional risk, which aligns with choice A. Choices B, C, and D describe behaviors that are not universally true for all risk-averse investors.

Most Investors Exhibit Risk Averse Behaviour Which Means