Studies show that investors are willing to run a greater risk to avoid a loss than to make a gain.In behavioural finance this is called loss aversion.

Question

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This statement is true. Loss aversion refers to the tendency of investors to feel the pain of losses more acutely than they feel pleasure from gains of the same amount. As a result, they may be willing to take on additional risk in order to avoid losses or try to break even, rather than taking a more conservative approach to investing.

Studies Show That Investors Are Willing to Run a Greater