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 these

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, different investors can have indifference curves that intersect, and the highest indifference curve offers the greatest utility.

In a Return-Standard Deviation Space,which of the Following Statements Is(are)true