n NISM Certifications
X NISM Series X
Medium

A positive relationship between expected return and expected risk indicates that investors are ________.

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Risk seekers

  2. B

    Risk neutral

  3. Risk averse

    Correct answer

  4. D

    None of the above

Why this is the answer

Risk-averse investors require higher expected returns to compensate for higher risk, reflecting a positive risk-return relationship.

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