Examveda
Examveda

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 will always invest in the investment with the lowest possible risk

D. they avoid the stock market due to the high degree of risk

Answer: Option D

Solution(By Examveda Team)

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.

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Related Questions on Financial Management

Investment is the _______________.

A. net additions made to the nation’s capital stocks

B. person’s commitment to buy a flat or house

C. employment of funds on assets to earn returns

D. employment of funds on goods and services that are used in production process