Unformatted text preview: rd, but greater chance of failure The more risk averse an individual is, the greater the risk premium required to induce them to invest The more risk tolerant the individual, the slower they discount the future Stock – required rate of return an investor has in order to be willing to hold a certain stock Who pays a higher price, the risk averse investor or the risk tolerant investor? The Risk Tolerant Investor – they have a lower risk tolerance and thus discount slower 2 Components of Asset...
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- Fall '09
- Opportunity Cost, Resale Value, discounted present value, risk tolerant investor, Generate future income