Large Firms That Can Take on a Number of Small

Multiple Choice

Large firms that can take on a number of small investment projects whose returns are independent of each other would most likely be characterized as:

A) risk-averse, because large firms do not like to take any risk.
B) risk-neutral, because each investment project is small relative to the total and firms are incentivized to maximize profits.
C) risk-loving, because there are a lot of benefits to being the biggest and most powerful firm.
D) risk-gaining, because there are a lot of benefits to being the biggest and most powerful firm.