The price of your investment increases 20% one month after you buy it. You do not believe that the stock's prospects have changed. Which one of the following actions would indicate the lowest amount of risk aversion?

A) You hang on to the stock, anticipating that it will go higher.
B) You buy more stock, anticipating that it will go higher.
C) You sell all of your stock holdings immediately.
D) You sell half of your stock holdings and invest the proceeds in other areas of your portfolio.

Question

Eliza Grace · Accepted Answer

Final Answer : B, Explanation :  Buying more stock, anticipating that it will go higher, indicates a willingness to take on more risk for the potential of higher returns, showing the lowest amount of risk aversion.

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