# Question: Differentiate among the three basic risk preferences risk indifferent risk averse and

Differentiate among the three basic risk preferences: risk-indifferent, risk-averse, and risk-seeking. Which of these attitudes toward risk best describes most investors?

## Answer to relevant Questions

Describe the steps involved in the investment decision process. Be sure to mention how returns and risks can be evaluated together to determine acceptable investments. Define yield (internal rate of return). When is it appropriate to use yield rather than the HPR to measure the return on an investment? Assume you invest $5,000 today in an investment that promises to return $9,000 in exactly 10 years. a. Use the present value technique to estimate the yield on this investment. b. If a minimum return of 9% is required, would ...For each of the following streams of dividends, estimate the compound annual rate of growth between the earliest year for which a value is given and 2014. The risk-free rate is 7%, and expected inflation is 4.5%. If inflation expectations change such that future expected inflation rises to 5.5%, what will the new risk-free rate be?Post your question