1. Which of the following statement is false?
Risk seeking investor is the typical profile of a gambler, will choose to gamble because it’s not about the returns.
Risk seeking investor loves taking risk, and gets additional pleasure by taking the risk.
A risk lover definitely wants to increase his returns but his utility (level of happiness) increases from the extra risk that he takes.
For risk lovers, the risk-return curve slopes downwards, i.e. the return they receive reduces and the risk increases.
All the above are true
None are true
2. Who is only concerned about the return but does not worry about the risk posed by the investment. As long as an investment provides high returns, this type of investor will go for it.
Risk seeking investor
Risk averse investor
Risk neutral investor
either of the above