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For a risk averse investor:

A)    a risk-free investment is always preferable to a risky investment, no matter the return on the risky investment.       

B)    a risky investment must have a higher rate of return than the return on a risk-free investment.       

C)    a risky investment is very attractive.       

D)    a risky investment will not be acceptable.

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Question ajoutée par Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies
Date de publication: 2016/02/03
Shahbaz Hayder
par Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Yes, Option B is the right answer.

When a risk averse investor faces with two investments have the same expected return but different risks, will prefer the investment with the lower risk. 

 

Therefore the answer is B.

 

 

 

Ahmed Alkhateb
par Ahmed Alkhateb , Independent Accounting , Self employed

B is the correct answer for the question

Muhammad Arman Badar
par Muhammad Arman Badar , COST/FINANCE CONTROLLER , APEC INDUSTRIES LLC

B)    a risky investment must have a higher rate of return than the return on a risk-free investment.    

Zehab Osman
par Zehab Osman , Accountant , Aldar Consultancy Co.

==========option b==============

Frank Mwansa
par Frank Mwansa , ACCOUNTING LECTURER , FREELANCER

A.)   a risk- free investment is always preferable to a risky investment , no matter the return on the risky investment

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