With regards to an investment project, which of the following is TRUE?
A)A risk-neutral individual is more likely to invest than a risk-averse individual.
B)A risk-neutral individual is more likely to invest than a risk-loving individual.
C)A risk-neutral individual is less likely to invest than a risk-averse individual.
D)Not enough information is given.

Question

Quizplus · Accepted Answer

A risk-neutral individual is indifferent towards risk and therefore, the presence or absence of risk would not affect their decision to invest. On the other hand, a risk-averse individual may be less likely to invest due to the presence of risk, while a risk-loving individual may be willing to invest despite the presence of risk. Therefore, option A is the only true statement.

With Regards to an Investment Project, Which of the Following