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If an Investor Has a Risk Tolerance of 8, This

Question 5

Multiple Choice

If an investor has a risk tolerance of 8, this means he


A) is a risk taker.
B) will accept 8 additional units of variance for an additional 1% expected return.
C) will accept 1 additional unit of standard deviation for an additional 8% expected return.
D) will accept 8 units of standard deviation for an additional 1% expected return.

Correct Answer:

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