CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Utility curves will be very ______ for a less risk-averse investor.
A. flat
B. curved
C. curvilinear
Explanation: If investors are very risk-averse, their utility curves will be very steep, indicating they will not tolerate much additional risk to obtain additional returns. A less risk-averse investor will have less steep utility curves.

User Contributed Comments 6

User Comment
vivi2005 note: the "less" in the question!!!!!!
Evgenia1 good point vivi2005
anal11 note the "_____" in the question!!!!! :-)vivi2005
tijelo True
nmech1984 L.E.S.Shit
Albireo The word 'less' here is either misleading or incorrect. And also the word 'very' is misleading and/or incorrect. Two investors could be different in their risk aversion. It doesn't mean the LESS risk-averse one will have a very flat utility/indifference curve, right??
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