Which of the Following Is True of Risk Aversion

Multiple Choice

Which of the following is true of risk aversion?

A) Greater risk aversion results in lower required returns for each level of risk.
B) A reduction in risk aversion causes the required return for each level of risk to increase.
C) In general, widely shared expectations of hard times ahead tend to cause investors to become less risk averse.
D) Changes in risk aversion, and therefore shifts in the SML, result from changing preferences of investors.