Other things held constant, a risk-averse investor requires a higher return to invest in securities with higher risks, which means they will pay lower prices for such investments.

Question

Quizplus · Accepted Answer

This statement is true. Risk-averse investors require a higher return to compensate for the additional risk they are taking on, and as a result, they are willing to pay lower prices for investments with higher risks.

Other Things Held Constant, a Risk-Averse Investor Requires a Higher