Question

1. Explain the relationship between risk-loving and risk-averse investors and the strategy of investors. (20 p.)

Answer 1

RISK LOVING INVERSTOERS AND STRATEGY OF INVESTERS A RELATIONSHIP STUDY

THE TERM RISK AVERS OR RISK RISK LOVING DESCRIBES THE INVESERS WHO CHOOS THE PREVENTION OF CAPITAL OVER THE POTENTION FOR A HIGHER THA AVERAGE RETERN.

-IN INVESTING RISK EQUALS PRICE VOLATILITY .VOLATILITY INVESTMENT GROW FAST THAN CONSERVATIVE INVESTMENT

-LOW RISK MEANS STABILITY AND IT GUARANTEES A RESONABLE GROWTH AND HIGH RISK INVESTMENT MAY GAIN OR LOSS A BUNDLE OF MONEY.

-AN INVESTMENT STRATEGY IS WHAT GUIDE AN INVESTOR'S DECISION BASED ON GOALS,RISK TOLERANCE AND FUTURE NEEDS OF CAPITAL.

-SOME INVESTMENMT SRATETGIES SEEK RAPID GROWTH WHERE AN INVESTORS FOCUSES ON CAPITAL APPRECIATION.

THRE HAVE A RELATION WITH RISK LOVING AND INVESTMENT STRATEGIES.

IF CAPITAL APPRECIATION IS THE GOAL INVESTORS PREFER LOW RISK INVESTMENTS.

-RISK AVERS INVESTORS PRIORITIZE THE SAFTY OF PRINCIPAL OVER THE POSSIBILITY OF A HIGHER RETERN ON THEIR MONEY.

-RISK AVERS PREFER LIQUID INVESTMENT THAT IS THEIR MONEY CAN BE ACCESSED WHEN NEEDE

-RISK LOVIN INVESTORS GENARALLY FAVOR DIVIDENT GROWTH STOCKS,MUNCIPAL AND CORPORATE BONDS.CD s AND SAVING ACCOUNTS

-WHEN RISK INCRESES CHANCES TO GAIN PROFITS INCRESES

-FOR LONG TIME RISK LESS INVESTMENT IS BETTER

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