The fact that not everyone places all of his/her savings in U.S. Treasury bonds indicates that:
A) most investors are not risk averse.
B) many investors are actually risk seekers.
C) even risk-averse people will take risk if they are compensated for it.
D) most people are risk-neutral.

Question

Quizplus · Accepted Answer

This is because the fact that not everyone places all of their savings in U.S. Treasury bonds suggests that even risk-averse people will take on risk if they are compensated for it. This implies that people are willing to take on some risk as long as they are adequately compensated for it, which is consistent with the principles of rational decision-making.

The Fact That Not Everyone Places All of His/her Savings