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A risk-averse investor: a. Always prefers a certain return to an uncertain one with the same expected return. b. Requires compensation in the form of

A risk-averse investor: a. Always prefers a certain return to an uncertain one with the same expected return. b. Requires compensation in the form of a risk premium in order to take risk. c. Trades off between risk and expected return: the higher the risk, the higher the expected return risk-averse investors will require for holding an investment.

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