Question

"Risk aversion" describes investors': O reluctance to acquire any risky asset, regardless of its expected return. eagerness to acquire any risky asset, regardless of its risk. preference for investments with less risk to those with more risk, as long as expected returns are equal. n preference for investments with more risk to those with less risk, as long as expected returns are equal. preference for investments with lower return to those with more higher, as long as their risks are equal.

Answer 1

THE RISK AVERSION DESCRIBES INVESTOR'S PREFERENCE FOR INVESTMENTS WITH LESS RISK TO THOSE WITH MORE RISK, AS LONG AS EXPECTED RETURNS ARE EQUAL. THE RISK AVERSE INVESTORS ALWAYS PREFER TO CHOOSE PROJECTS HAVING LOWER RISK WHEN THEY HAVE TWO OPTIONS HAVING SIMILAR EXPECTED RETURN.