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(a) Risk aversion
(b) Desire for Risk
(c) Indifference to Risk
a)A Risk averter is an individual who prefers less risky investment. The basic assumption in financial
theory is that most investors and managers are risk averse.
b)Risk seekers on the other hand are individuals who prefer risk. Given a choice between more and less
risky investments with identical expected monetary returns, they would prefer the riskier investment.
c)The person who is indifferent to risk would not care which investment he or she received.
Kavungya answered the question on April 13, 2021 at 09:00
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flow value
Sh`000' Sh`000'
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1 2,000 3,000
2 1,875 1,900
3 1,750 0
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