Formula of approximations of real return-rate of inflation

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Reference no: EM13847476

Please mark the following as either True or False

1. The formula of the approximations of the real return becomes less accurate as the rate of inflation increases.

2. When deciding between a risky asset (or portfolio) and a risk-free asset, the more risk averse the investor, the greater the proportion they will choose to invest in the risky asset

3. For a given set of possible cash flows, as the required risk premium for a project increases, its price must decrease to entice investors to purchase the asset.

Reference no: EM13847476

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