In a return-standard deviation space, which of the following statements is(are) true for risk-averse investors? (The vertical and horizontal lines are referred to as the expected return-axis and the standard deviation-axis, respectively.)I) An investor's own indifference curves might intersect.II) Indifference curves have negative slopes.III) In a set of indifference curves, the highest offers the greatest utility.IV) Indifference curves of two investors might intersect.
A) I and II only
B) II and III only
C) I and IV only
D) III and IV only
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Indifference curves for risk-averse investors have positive slopes, not negative, and they do not intersect for a single investor. However, indifference curves of two different investors might intersect, and the highest indifference curve offers the greatest utility.

In a Return-Standard Deviation Space, Which of the Following Statements