- Option : A
- Explanation : The most risk-averse investor has the indifference curve with the greatest slope.

You must be logged in to post a comment.

- Option : C
- Explanation : Risk-averse investors are generally willing to invest in risky investments, if the return on the investment is sufficient to reward the investor for taking on this risk. Participants in securities markets are generally assumed to be risk-averse investors.

You must be logged in to post a comment.

You must be logged in to post a comment.

Stock | Standard Deviation | Portfolio Weights |

ABC | 36% | 40% |

JKL | 27% | 60% |

- Option : A
- Explanation :

You must be logged in to post a comment.

You must be logged in to post a comment.

5. The following data is available:

Expected Return | Standard Deviation | Risk aversion coefficient |

15% | 27% | 4 |

- Option : C
- Explanation : U = E(r) – 0.5Aσ² U = 0.15 – 0.5 * 4 * 0.27² = 0.0042

You must be logged in to post a comment.

You must be logged in to post a comment.

You must be logged in to post a comment.