Question: Which statement is correct? Risk - averse investors require higher rates of return on investments whose returns are highly certain, and most investors are risk

Which statement is correct?

Risk

-

averse investors require higher rates of return on investments whose returns are highly certain, and most investors are risk averse.

The coefficient of variation, calculated as the standard deviation of expected returns divided by the expected return, is a standardized measure of the risk per unit of expected return.

The standard deviation is a better measure of risk than the coefficient of variation if the expected returns of the securities being compared differ significantly.

The tighter the probability distribution of its expected future returns, the greater the risk of a given investment as measured by its standard deviation.

The greater the probability of a return far below that anticipated, the lower the risk.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. True False

Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. a . True b . False

Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. True False

Risk-averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. True False

7 Question 8 3 pts Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. True False

Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. True False

ear, then the series is by definition an Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse.

Risk - averse investors require higher rates of return on investments whose returns are highly uncertain, and most investors are risk averse. True False

Explain why an analyst needs to understand how people think, how they learn, how they react to change, how they communicate, and how they work.

A voltage source given by vs (t) = 25 cos (2 x 103t 30o) (V) is connected to a series RC load as shown in Fig. 1-19. If R = 1 M and c = 200 pF, obtain an expression for vc (t), the voltage across...

3 2 . Arneldo Potter has a 2 0 percent interest in a partnership and he materially participates in the partnership's business. Arneldo's adjusted basis in the partnership was $ 2 6 , 0 0 0 at the...

A company issues 1,050 shares of its common stock for $33,600 cash. Prepare journal entries to record this event under each of the following separate situations.