When comparing different investments, a risk-averse investor is likely to focus on?

A risk-averse investor prioritizes the relationship between expected return and risk when evaluating different investment options. This investor is inherently cautious and seeks to minimize potential losses while still aiming for a satisfactory return on their investments.

By focusing on the expected return, the investor assesses how much they might earn from the investment, while evaluating risk involves understanding the potential for loss or volatility associated with that investment. The balance between these two components is crucial for a risk-averse individual, as they would prefer options that provide a reasonable return with the lowest possible risk.

This approach contrasts with simply looking at future market trends, which can be speculative and uncertain; or relying on past performance, which may not be indicative of future results. The age of the investment might also be less relevant to a risk-averse investor compared to evaluating the expected outcomes in terms of risk and return. By concentrating on expected return and risk, the investor can make informed decisions that align with their financial goals while managing their overall risk exposure.