Which of the following statements are true?
A) The value of any investment is based on the cash flows it is expected to generate in the future.
B) Investors are not generally risk averse.
C) Uncertain cash flows are preferred to certain cash flows.
D) All of the above are true.
E) None of the above are true.

Question

Quizplus · Accepted Answer

The value of any investment is based on the cash flows it is expected to generate in the future. This is true because investors make investment decisions based on the future returns they expect to receive from that investment.

B is false. Most investors are risk averse and try to minimize risk as much as possible.

C is false. Investors generally prefer certain cash flows to uncertain cash flows because it is easier to quantify and manage risks associated with certain cash flows.

D and E are false.

Which of the Following Statements Are True