Investors are particularly averse to the possibility of even a very small loss and need a high return to compensate for it.Such a concept is related to which theory?
A)market efficiency theory
B)random walk theory
C)convergence trading
D)prospect theory

Question

Quizplus · Accepted Answer

The concept described in the question is related to prospect theory, which explains how individuals make decisions under the influence of both risk and uncertainty. It suggests that people are generally risk-averse when it comes to potential losses and require a higher potential return to compensate for that risk.

Investors Are Particularly Averse to the Possibility of Even a Very