Investor 1 is more risk averse than investor 2. This means that for the same amount of extra risk, investor 1 will demand ________  risk-premium than investor 2. Select one: a. higher b. lower
Investor 1 is more risk averse than investor 2. This means that for the same amount of extra risk, investor 1 will demand ________  risk-premium than investor 2.
Select one:
a. higher
b. lower
Homework Answers
Risk premium is the compensation to compensate for tolerating the extra risk above the risk free rate.
Hence, the answer is option b, higher.
In case of any query, kindly comment on the solution.
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Investor 1 is more risk averse than investor 2. This means that for the same amount of extra risk, investor 1 will demand ________  risk-premium than investor 2. Select one: a. higher b. lower
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