Other things held constant, a risk-averse investor requires a higher return to invest in securities with higher risks, which means they will pay lower prices for such investments.
Answer the following statement true (T) or false (F)
True
A risk-averse person requires positive rewards to take on risks, and higher risks require higher rewards. When this concept is applied to investments, other things held constant, the higher a security's risk, the higher the return investors demand, and thus the less they are willing to pay for the investment. See 8-2: Expected Rate of Return
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Indicate whether the statement is true or false
Explain how a cost leadership strategy permits a firm to address the five forces in their competitive environment so it can enjoy higher-than-normal profits.
What will be an ideal response?
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Indicate whether the statement is true or false