Risk aversion is a general dislike for risk and a preference for certainty. That is, investors would be willing to give up a risk premium of return in order to obtain a lower return with certainty.

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Risk aversion describes a commonly observed behavior in investors, where they are willing to accept lower returns in exchange for lower risk or greater certainty in their investment outcomes. This means that they are willing to pay a premium for safety or security, and are often more concerned with avoiding losses than maximizing gains. Therefore, the statement is true.

Risk Aversion Is a General Dislike for Risk and a Preference