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A) a risk-free investment is always preferable to a risky investment, no matter the return on the risky investment.
B) a risky investment must have a higher rate of return than the return on a risk-free investment.
C) a risky investment is very attractive.
D) a risky investment will not be acceptable.
Yes, Option B is the right answer.
When a risk averse investor faces with two investments have the same expected return but different risks, will prefer the investment with the lower risk.
Therefore the answer is B.
B is the correct answer for the question
B) a risky investment must have a higher rate of return than the return on a risk-free investment.
==========option b==============
A.) a risk- free investment is always preferable to a risky investment , no matter the return on the risky investment
