Which of the following statements is (are)true about risk aversion?
A)Risk-averse investors would be indifferent between investing in a risk-free investment that will earn 4% or a risky asset that has a 50% chance of earning 8% and a 50% chance of
Returning 0%.
B)Risk-averse investors should accept only fair bets.
C)The effective risk-aversion of a group of investors is less than the risk aversion of any single investor.
D)Both A and B are true.

Question

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The Answer of Which of the following statements is (are)true about risk aversion?
A)Risk-averse investors would be indifferent between investing in a risk-free investment that will earn 4% or a risky asset that has a 50% chance of earning 8% and a 50% chance of
Returning 0%.
B)Risk-averse investors should accept only fair bets.
C)The effective risk-aversion of a group of investors is less than the risk aversion of any single investor.
D)Both A and B are true.

Which of the Following Statements Is (Are)true About Risk Aversion