Joel and Liza are having a disagreement over one of their stock investments, which just lost 15 percent in a short period of time. Liza has a very high risk tolerance, but Joel has a low risk tolerance. What would Liza argue?

Question

Social Studies

Aleena

14 August, 18:25

Joel and Liza are having a disagreement over one of their stock investments, which just lost 15 percent in a short period of time. Liza has a very high risk tolerance, but Joel has a low risk tolerance. What would Liza argue?

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Answers (2)

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Emerson Proctor · Answer 1

I believe the answer is: Buy more stock at the lower price

Investors with High risk tolerance tend prefer buy a lot of stock at a lower price and betting that the value would come up in the future.

This move is considered to be very risky because there is no guarantee that the value would increase. But, if it does, the reward that received by investors would be significantly larger compared to low risk approach.

Julia Watts · Answer 2

If Joel and Liza are having a disagreement over one of their stock investments and Liza has a very high risk tolerance, she would most likely argue that they should keep their money invested, since this would be the riskier move.