Question 4 Investors typically receive the same gross 'market' return. Listed below are some ways in which investors may differ. For the sake of argument, assume that investors differ along only one of these dimensions. Which would be least likely to imply that investors place different values on the returns they receive? (a) Tax rates (b) Costs incurred when investing (c) Objectives (d) Risk aversion (e) Baseline (i.e. reference) portfolio Question 5 Which of the following statements about illiquidity is more correct? (a) Illiquidity relates to the additional cost of trading illiquid securities. (b) Illiquidity can have a significantly different impact across investors. (c) Illiquidity risk relates to the possibility that an investor may not be able to sell. (d) Illiquidity risk is a constant in the market. (e) Illiquidity is simple to analyze. Question 4 Investors typically receive the same gross 'market' return. Listed below are some ways in which investors may differ. For the sake of argument, assume that investors differ along only one of these dimensions. Which would be least likely to imply that investors place different values on the returns they receive? (a) Tax rates (b) Costs incurred when investing (c) Objectives (d) Risk aversion (e) Baseline (i.e. reference) portfolio Question 5 Which of the following statements about illiquidity is more correct? (a) Illiquidity relates to the additional cost of trading illiquid securities. (b) Illiquidity can have a significantly different impact across investors. (c) Illiquidity risk relates to the possibility that an investor may not be able to sell. (d) Illiquidity risk is a constant in the market. (e) Illiquidity is simple to analyze