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According to market risk premium, an amount of risk premium depends upon investor

A. risk taking

B. risk aversion

C. market aversion

D. portfolio aversion

Answer: Option B

Solution(By Examveda Team)

According to market risk premium, an amount of risk premium depends upon investor risk aversion. The term risk-averse refers to investors who, when faced with two investments with a similar expected return, prefer the lower-risk option.

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