Chapter 06 Risk Aversion and Capital Allocation to Risky ：06章风险规避与风险资本配置.doc

Chapter 06 Risk Aversion and Capital Allocation to Risky Assets ? Multiple Choice Questions? 1.?Which of the following statements regarding risk-averse investors is true??A.?They only care about the rate of return.B.?They accept investments that are fair games.C.?They only accept risky investments that offer risk premiums over the risk-free rate.D.?They are willing to accept lower returns and high risk.E.?They only care about the rate of return and accept investments that are fair games. ? 2.?Which of the following statements is (are) true? I) Risk-averse investors reject investments that are fair games.II) Risk-neutral investors judge risky investments only by the expected returns.III) Risk-averse investors judge investments only by their riskiness.IV) Risk-loving investors will not engage in fair games.?A.?I onlyB.?II onlyC.?I and II onlyD.?II and III onlyE.?II, III, and IV only ? 3.?Which of the following statements is (are) false? I) Risk-averse investors reject investments that are fair games.II) Risk-neutral investors judge risky investments only by the expected returns.III) Risk-averse investors judge investments only by their riskiness.IV) Risk-loving investors will not engage in fair games.?A.?I onlyB.?II onlyC.?I and II onlyD.?II and III onlyE.?III, and IV only ? 4.?In the mean-standard deviation graph an indifference curve has a ________ slope.?A.?negativeB.?zeroC.?positiveD.?northeastE.?cannot be determined ? 5.?In the mean-standard deviation graph, which one of the following statements is true regarding the indifference curve of a risk-averse investor??A.?It is the locus of portfolios that have the same expected rates of return and different standard deviations.B.?It is the locus of portfolios that have the same standard deviations and different rates of return.C.?It is the locus of portfolios that offer the same utility according to returns and standard deviations.D.?It connects portfolios that offer increasing utili