Solved

Will Is Risk Averse and Has $1,000 with Which to Make

Question 9

Multiple Choice

Will is risk averse and has $1,000 with which to make a financial investment.He has three options.Option A is a risk-free government bond that pays 5 percent interest each year for two years.Option B is a low-risk stock that analysts expect to be worth about $1,102.50 in two years.Option C is a high-risk stock that is expected to be worth about $1,200 in four years.Will should choose


A) option A.
B) option B.
C) option C.
D) either option A or option B because Will is indifferent between those two options and they are superior to option C.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions