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Basic Question 15 of 16
Which statement(s) is (are) true?
II. A risk-averse individual will not engage in a fair bet.
III. For an investor there are many indifference curves.
I. A risk-averse individual has concave indifference curves.
II. A risk-averse individual will not engage in a fair bet.
III. For an investor there are many indifference curves.
User Contributed Comments 2
| User | Comment |
|---|---|
| gill15 | Why is III correct? I thought each IC is different depending on the type of investor you are. A high risk aversion will have one IC and and risk lover will have a different one. Each investor has their own specific criteria which vary ALONG one IC.... Dont get it |
| schweitzdm | An IC is the set of porfolios with the same utility score. Utility score for a security varies from investor to investor. |
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Learning Outcome Statements
explain risk aversion and its implications for portfolio selection
CFA® 2025 Level I Curriculum, Volume 2, Module 1.