Q21
Most investors are risk averse which means____________.
A.
they will assume more risk only if they are compensated by higher expected return
B.
they will always invest in the investment with the lowest possible risk
C.
they avoid the stock market due to the high degree of risk
AnswerD.
None of the above
Answer: Option C
Solution
Answer: Option C
Solution:
Most investors are risk averse which means they avoid the stock market due to the high degree of risk. A risk-averse investor, on the other hand, dislikes risk and, thus, stays away from high-risk stocks or investments and is prepared to forego higher rates of return.