- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 52. Portfolio Risk and Return: Part I
- Subject 4. Risk Aversion and Portfolio Selection
CFA Practice Question
A risk-averse investor is most accurately described by which of the following statements? A risk-averse investor will ______
A. choose the lowest-risk alternative.
B. choose the lowest-risk alternative as long as it has a modest expected return.
C. consider higher risk alternatives only if they offer an expected return high enough to compensate for the additional risk.
Explanation: A risk-averse investor requires additional expected return as compensation for additional risk.
User Contributed Comments 0
You need to log in first to add your comment.