Question

If investor a has a lower risk aversion coefficient than investor b, on the capital allocation line, will investor b's optimal portfolio most likely have a higher expected return?

Answer 1

In other words, among various investments giving the same return with different level of risks, this investor always prefers the alternative with least interest. Description: A risk averse investor avoids risks. ... Risk lover is a person who is willing to take more risks while investing in order to earn higher returns.

Answer 2

Answer:

When considering a portfolio that is optimal for one investor, a second investor with a higher ... C. have a lower return expectation for the portfolio. C ... B. steeper capital allocation ...