Since for a given increase in risk, most managers require an increase in return, they are
A) risk-seeking
B) risk-free
C) risk-averse
D) risk-indifferent

Question

Quizplus · Accepted Answer

Managers who require an increase in return for a given increase in risk are risk-averse, which means they prefer lower risk and are willing to accept lower returns to avoid risk. They are not risk-seeking, which means they are willing to take higher risk to achieve higher returns, nor risk-indifferent, which means they are neither willing to take higher risk nor demanding higher return. Risk-free is not applicable in this scenario because every investment has some level of risk.

Since for a Given Increase in Risk, Most Managers Require