For a risk-averse manager, the required return increases for an increase in risk.

Name: For a risk-averse manager, the required return increases for an increase in risk.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A risk-averse manager is someone who avoids or minimizes risks, and as such, they will require a higher return as compensation for taking on more risk. This is because they prefer a certain return over an uncertain return, and therefore, they need to be incentivized to take on additional risk.

For a Risk-Averse Manager, the Required Return Increases for an Increase