CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Which statement(s) is (are) true?

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.
Correct Answer: II and III

I. Indifference curves are convex, due to the diminishing marginal utility of return.

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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