Based on their relative degrees of risk tolerance
A) investors will hold varying amounts of the risky asset in their portfolios.
B) all investors will have the same portfolio asset allocations.
C) investors will hold varying amounts of the risk-free asset in their portfolios.
D) a and c.
E) none of these.

Question

Quizplus · Accepted Answer

Investors with different risk tolerances will adjust their portfolios by holding different amounts of both risky and risk-free assets to match their individual risk preferences.

Based on Their Relative Degrees of Risk Tolerance