In finance, we assume that investors are generally [blank].
A)tolerant of risk
B)averse to risk
C)expecting risk
D)natural risk-takers

Question

Quizplus · Accepted Answer

Finance theory generally assumes that investors are risk averse, meaning they require compensation in the form of higher expected returns in order to take on more risk. This is because most investors prefer to avoid potential losses more than they desire potential gains.

In Finance, We Assume That Investors Are Generally [Blank]