Given a choice between two investments with the same expected payoff most people will:

A. choose the one with the lower standard deviation.
B. calculate the variance to assess the relative risks of the two choices.
C. be indifferent since the expected payoffs are the same.
D. opt for the one with the higher standard deviation.


Answer: A

Economics

You might also like to view...

Can health differences fully explain the large disparities in productivity and income per capita across countries?

What will be an ideal response?

Economics

A GDP price index of 100 for a year implies that: a. there has been no inflation during the year

b. the price level is three times what it was in the base year. c. the price level is one hundred times what it was in the base year. d. the price level is double what it was in the base year. e. the inflation rate has been 100 percent per year since the base year.

Economics

The process of financial intermediation:

A. is always used when a borrower needs to obtain funds. B. creates a net cost to an economy. C. increases the economy's ability to produce. D. is used primarily in underdeveloped countries.

Economics

Which of the following events will most likely cause an increase in both the price level and rGDP?

A) The prime rate increases B) Exports increase C) Income taxes increase D) Crude oil prices decrease E) Inflationary expectations decrease

Economics