Given that most investors tend to be risk averse
A) no one buys risky assets.
B) there's a trade-off between risk and return.
C) low risk assets provide the best return.
D) it must be a superior strategy compared to one that is risk loving.

Question

Quizplus · Accepted Answer

Most investors tend to be risk averse because they are not willing to take on high levels of risk without the promise of a higher return. Therefore, there is a trade-off between risk and return, where higher levels of risk are associated with the potential for higher returns. As a result, investors must weigh the risks and returns of different investment options in order to make informed decisions about their portfolios.

Given That Most Investors Tend to Be Risk Averse