If two investments have the same expected return,a rational investor will choose the investment with the greater risk in an effort to get a much larger return.

Question

Quizplus · Accepted Answer

A rational investor would not necessarily choose the investment with greater risk for the same expected return. Rational investors consider both risk and return when making investment decisions. If two investments have the same expected return, a rational investor would choose the investment with lower risk to minimize potential losses.

If Two Investments Have the Same Expected Return,a Rational Investor