Answer :
True It depends upon investor A risk-averse investor tends to undervalue the rate of return on a project than a risk-neutral investor.
An investor who is risk averse would rather have lower returns with known risks than higher returns with unknown risks. To put it another way, risk averse investor always chooses the investment with the lowest interest rate out of a variety of options offering the same return but varying degrees of risk.
Risks are avoided by a risk-averse investor. He or she avoids investments with high risks and favors investments with a guaranteed return. These risk averse Investors enjoy investing in index funds, debentures, and government bonds.
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