Risk aversion is the behavior exhibited by managers who require ________.
A) an increase in return, for a given decrease in risk
B) an increase in return, for a given increase in risk
C) no changes in return, for a given increase in risk
D) decrease in return, for a given increase in risk

Question

Quizplus · Accepted Answer

Risk aversion is the attitude of preferring to avoid risk unless compensated by higher returns. Therefore, risk-averse managers require an increase in return for taking on additional risk.

Risk Aversion Is the Behavior Exhibited by Managers Who Require