Given two investments P and Q, with the former having a mean 0.7 and variance 0.17 and the latter having a mean 0.7 and a variance 0.03, a risk-preferrer will be indifferent between the two.

Question

Quizplus · Accepted Answer

A risk-preference investor would prefer the investment option with lower variance, as it indicates lower risk. In this case, investment Q has a lower variance than investment P, so the risk-preference investor would choose investment Q over P. Therefore, the statement is false.

Given Two Investments P and Q, with the Former Having