Which one of the following is a better argument than the three against the risk aversion assumption of the Markowitz theory?
A) Few people would turn down an extra dollar offered to them.
B) Many instances can be cited of behavior inconsistent with risk aversion.
C) Risk averse investors have more steeply sloped indifference curves.
D) Investor behavior is complicated and not easily generalized.

Question

Quizplus · Accepted Answer

The argument that investor behavior is complicated and not easily generalized challenges the foundational assumption of risk aversion in Markowitz theory by highlighting the diversity and complexity of real-world investor behavior, which cannot be fully captured by a single theoretical assumption. This contrasts with the other options that either provide specific instances or characteristics that do not directly challenge the underlying assumption of risk aversion in a comprehensive manner.

Which One of the Following Is a Better Argument Than