If you are risk averse, you will:
A) only invest in low-risk investments.
B) invest in an asset based only on its return, ignoring the risk of the asset.
C) invest only in high-risk assets.
D) invest in riskier assets only if there is additional return for taking the extra risk.
E) avoid risk at all costs.

Question

Quizplus · Accepted Answer

Risk-averse individuals prefer to avoid risk but may invest in riskier assets if they are compensated with higher expected returns for taking on the additional risk.

If You Are Risk Averse, You Will