What is the typical reason why investors would choose to put their money into an investment with higher risk rather than one with lower risk? Riskier investments typically have higher returns. Assuming enough risk in a portfolio qualifies investors for a large government tax credit. They are irrational or are thrill‑seekers. They want to signal their courage to other investors and scare them away. Riskier investments are insured by the FDIC.
What is the typical reason why investors would choose to put their money into an investment with higher risk rather than one with lower risk? Riskier investments typically have higher returns. Assuming enough risk in a portfolio qualifies investors for a large government tax credit. They are irrational or are thrill‑seekers. They want to signal their courage to other investors and scare them away. Riskier investments are insured by the FDIC.
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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Investors face various choices regarding what they can invest in, and the choices carry varying amounts of risk. For example, stock prices are much more volatile than bond prices.
What is the typical reason why investors would choose to put their money into an investment with higher risk rather than one with lower risk?
Riskier investments typically have higher returns.
Assuming enough risk in a portfolio qualifies investors for a large government tax credit.
They are irrational or are thrill‑seekers.
They want to signal their courage to other investors and scare them away.
Riskier investments are insured by the FDIC.
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