Question

Elias is a risk-averse investor. David is a less risk-averse investor than Elias. Therefore, Group of answer choices for the same risk, Elias requires a lower rate of return than David. for the same return, David tolerates higher risk than Elias. Cannot be determined. for the same risk, David requires a higher rate of return than Elias. for the same return, Elias tolerates higher risk than David.

Answer 1

Answer:

for the same return, David tolerates higher risk than Elias

Explanation:

The risk averse investor means that investors who know about the risk due to which they prefer less returns as compared with the risk i.e unknown

Therefore in the given case it is given that David is less risk averse investor as compared with Elias therefore for the same return David would be in high risk position as compared with the Elias due to risk averse condition

Hence, the second option is correct