AThe one who only invests in risk-free securities.Correct AnswerIncorrect Answer
BWill always choose a less volatile portfolioCorrect AnswerIncorrect Answer
CPrefers investments with less risk to those with more risk if they have the same expected returnCorrect AnswerIncorrect Answer
DInvests in government securitiesCorrect AnswerIncorrect Answer
EInvests only in equityCorrect AnswerIncorrect Answer
Solution
Risk-averse investors prefer lower risk to higher risk for a given level of expected return and will accept a riskier investment if they are compensated with a higher expected return. A risk-averse investor does not avoid risk altogether.
