CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Which of the following statements is (are) true?

I. Risk-averse investors reject investments that are fair game.
II. Risk-neutral investors judge risky investments only by the expected returns.
III. Risk-averse investors judge investments only by their riskiness.
IV. Risk-seeking investors will not engage in fair games.
Correct Answer: I and II

User Contributed Comments 8

User Comment
poomie83 Why is III not true?
hoyleng risk adverse investors go for high return with minimal risk
jonan203 fair games? i don't recall reading that anywhere...
robertucla What the hell are fair games?
gill15 Fair games is Flipping a coin....Risk neutral go for fair games.
PSVC Fair game = an investment prospect that has a zero risk premium.
Therefore investment without higher return for more risk. Risk Averse investors avoid Fair game.
merc5559 Why is IV true? I thought risk seekers went for worse odds than fair games.
seeyize @merc5559 IV is NOT true, because risk seekers WILL engage in fair games
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