Which of the following statements about risk is CORRECT? a.Investors are risk av

Question

Which of the following statements about risk is CORRECT?

a.Investors are risk averse, which means they would prefer bonds to sotcks because the former is less risky than the latter.

b. Apple Inc.'s stock has a smaller return volatility than that of Nvidia Inc., and but this does not necessarily mean that Apple shareholders should expect a lower return thatn Nvidia shareholders.

c. Apple Inc.'s stock has a lower beta than that of Nvidia Inc., and hence the former is a better investment choice for most investors.

d. A small investor is investing in 5 stock, and he should care only about the market risk of these securities.

Explanation / Answer

Bonds genereally carry less risk than equity and Preferred Stocks. Risk Averse investors are those investors who does not want to take high risk. Therefore they Prefer Bonds Instead of Stocks.

Correct Answer A

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.