Draw a set of indifference curves between risk and return

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Reference no: EM131005209

In the field of financial management it has been obseved that there is a trade-off between the rate of return that one earns on investments and the amount of risk that one must bear to earn that return.

1. Draw a set of indifference curves between risk and return for a person that is risk averse. (A person that does not risk)

2. Draw a set of indifference curves for a person that is risk neutral. (A person that does not care about risk one way or the other)

3. Draw a set of indifference curves for a person that likes risk.

Reference no: EM131005209

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