Which of the following investments would be most attractive to a risk$-$averse investor?

$\backslash$table$[[$Investment$,$Expected Value,Standard Deviation$],[$A$,50,5],[$B$,55,5],[$C$,55,7]]$

A risk$-$averse investor would be indifferent between investments $B$ and $C$ and prefer them to investment A because they have a higher expected value.

A risk$-$averse investor would prefer investment A because it has the lowest expected value.

A risk$-$averse investor will prefer investment $B$ because it has a higher expected return than investment A for the same level of risk and the same expected return as investment $C$ for a lower level of risk.

A risk$-$averse investor will prefer investment C because it has the highest expected value and standard deviation.

How would your answer differ if the investor were described as risk$-$neutral?

A risk$-$neutral investor would prefer investment A because it has the lowest expected value.

A risk$-$neutral investor will prefer investment $B$ because it has a higher expected return than investment A for the same level of risk and the same expected return as investment $C$ for a lower level of risk.

A risk$-$neutral investor would be indifferent between investments $B$ and $C$ and prefer them to investment A because they have a higher expected value.

A risk$-$neutral investor will prefer investment $C$ because it has the highest expected value and standard deviation.

Prev

$2$ of $26$

Next