Which One of the Following Statements Is FALSE

Multiple Choice

Which one of the following statements is FALSE?

A) When we compute the return of a security based on the average payoff we expect to receive,we call it the expected return.
B) The notion that investors prefer to have a safe income rather than a risky one of the same average amount is called risk aversion.
C) Because investors are risk averse,the risk-free interest rate is not the right rate to use when converting risky cash flows across time.
D) The more risk averse investors are,the higher the current price of a risky asset will be compared to a risk-free bond.