The principle of risk aversion can best be described as:
A)the observation that investors are unwilling to acquire very risky securities regardless of their risk premiums.
B)the hypothesis that people always prefer investments with less risk to those with more risk if the expected returns are equal.
C)the observation that risky securities usually offer unattractive expected returns when the possibility of loss is considered.
D)All of the above

Question

Quizplus · Accepted Answer

Risk aversion is the concept where individuals prefer less risky options over more risky ones when the expected returns are the same, reflecting a preference for certainty and a general aversion to risk.

The Principle of Risk Aversion Can Best Be Described As