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<p>a- Market Rate of Return</p> <p>b- Risk-free Rate of Return</p> <p>c- Portfolio Return</p> <p>d- None of the above</p> <p> </p>
Investors demand returns that are too high given risk aversion estimates and the stability of wealth.
Market Rate of Return (higher priority)
followed by: Risk-free Rate of Return and Portfolio Return
Risk averse investor tries to avoid risk as much as possible. So he will opt for investment in the following order:
1) Risk-free Rate of Return
2) Market Rate of Return / Portfolio Return
The measures of risks are variations and standard deviation, r-squared etc . This gives an investor an idea how likely he will gain or lose based on how dispersed the historical data are . Rate of return only measures how much he earned out of his investment. If the rates of return over a period of time did not change significantly, then it is less risky. Normally, a risk-averse investor would choose lower risk even if it comes with lower return. My answer is D none of the above.
None of the Above, Sir
Thanks i hope that you are ok divyesh
option B & C
B 1st then C2nd.
a- Market Rate of Return
b- Risk-free Rate of Return
c- Portfolio Return
Well explained by the lady but it can not be measure. So Option D
D) None of the above
a
