Question

Identify each of the following as being consistent with risk-averse, risk-neutral, or risk-seeking behavior in investment project selection. Explain your answers.
A. Larger risk premiums for riskier projects
B. Preference for smaller, as opposed to larger, coefficients of variation
C. Valuing certain sums and expected risky sums of equal dollar amounts equally
D. Having an increasing marginal utility of money
E. Ignoring the risk levels of investment alternatives



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  • CreatedFebruary 13, 2015
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