The investors degree of risk aversion is characterized by the slope of the indifference curve. Indifference curves
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The investor’s degree of risk aversion is characterized by the slope of the indifference curve.
Indifference curves show, at any level of expected return and risk, the required risk premium for taking on each additional percentage point of standard deviation. More risk-averse investors have steeper indifference curves; that is, they require a greater risk premium for taking on more risk. p-936
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ISE Investments
ISBN: 9781266085963
13th International Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
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