Suppose profits earned by one firm are independent of profits earned by other firms. When managers and shareholders diversify, then O poor outcomes of some projects are worsened by favorable outcomes of other projects. O both managers and shareholders are considered risk loving. O both managers and shareholders are considered risk averse. O poor outcomes of some projects can be offset by favorable outcomes of other projects.
Suppose profits earned by one firm are independent of profits earned by other firms. When managers and shareholders diversify, then O poor outcomes of some projects are worsened by favorable outcomes of other projects. O both managers and shareholders are considered risk loving. O both managers and shareholders are considered risk averse. O poor outcomes of some projects can be offset by favorable outcomes of other projects.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose profits earned by one firm are independent of profits earned by other firms. When managers and shareholders diversify, then
O poor outcomes of some projects are worsened by favorable outcomes of other projects.
O both managers and shareholders are considered risk loving.
O both managers and shareholders are considered risk averse.
O poor outcomes of some projects can be offset by favorable outcomes of other projects.
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