Which of the following statements are true? A. When faced with two investments w

Question

Which of the following statements are true? A. When faced with two investments with a similar expected return but different degrees of risk, a risk-averse investor would prefer the one with the lower risk. B. Risk-averse investors are the type who would see more benefit from a rise in an asset price than they would feel harmed by an equivalent-sized decline. C. The more averse to risk investors become, the smaller would be the required market risk premium. D. If the aversion to risk increased in the market, then investors would be expected to sell some of their holdings of stocks and corporate bonds and buy Treasury bills and Treasury bonds.

Explanation / Answer

D. If the aversion to risk increased in the market, then investors would be expected to sell some of their holdings of stocks and corporate bonds and buy Treasury bills and Treasury bonds. Please rate this answer first, thank you.

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