Risk-averse people will choose different asset portfolios than people who are not risk averse.Over a long period of time,we would expect that
A)every risk-averse person will earn a higher rate of return than every non-risk-averse person.
B)every risk-averse person will earn a lower rate of return than every non-risk-averse person.
C)the average risk-averse person will earn a higher rate of return than the average non-risk-averse person.
D)the average risk-averse person will earn a lower rate of return than the average non-risk-averse person.

Question

Quizplus · Accepted Answer

Risk-averse people tend to choose lower-risk portfolios, which may produce lower returns over the long term. Therefore, on average, we would expect risk-averse people to earn a lower rate of return than non-risk-averse people. However, this is not a universal rule, and there may be individual cases where a risk-averse person earns a higher rate of return than a non-risk-averse person.

Risk-Averse People Will Choose Different Asset Portfolios Than People Who