Fins2624: Indifference curve (1 Viewer)

[studymon]

For this question:

In the mean-standard devidation graph, which one of the following statements is true regarding the indifference curve of a risk-averse investor?

c) It is the combination of portfolios that offer the same utility according to returns and standard deviations.
d) it is the combination of portfolios that offer increasing utilities according to returns and standard deviations

...my choice in answers came down to these two. Apparently the real answer is c)

however, i dont quite understand why it can not be d)

could anyone please provide me with a reason as to why it isnt?

studymon

 

[wrong_turn]

an indifference curve should have the same utility with changing returns according to the different standard deviation.

increasing utilities i think occurs when you move onto a higher indifference curve, and therefore a different combination of risks and returns.

 

[08er]

i cant wait to do finance in 2nd year

 

[studymon]

thanks for the responses! i get it now :-D