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Suppose There's an 80% Chance of a Stock Rising by 20

Question 5

Multiple Choice

Suppose there's an 80% chance of a stock rising by 20% and a 20% chance of it falling by 40%.Which type of investor would prefer an investment with a guaranteed return of 5%?


A) risk loving investor
B) risk neutral investor
C) risk averse investor
D) Risk is not relevant in this example.

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