Final answer:
An investor with a diversified portfolio is likely to pay the highest price for an asset, as diversification allows for risk mitigation and potentially higher valuation for the investment.
Step-by-step explanation:
The investor who should be willing to pay the highest price for an asset is B) An investor with a diversified portfolio. This is because diversified portfolios aim to maximize returns by investing in a variety of assets. These investors are less affected by the poor performance of a single asset due to the mitigation of risks across different investments. Diversification tends to cancel out extreme increases and decreases in value due to the performance of various assets, making such portfolios less risky and potentially more valuable to an investor who understands and appreciates the benefits of diversification.
Investors who do not diversify, such as those with a single-asset portfolio or those not fully diversified, face greater risks as their investments are more vulnerable to market fluctuations in the sectors they are concentrated in. The most risk-averse investor, who is so concerned with the potential losses that they fail to see the benefit of diversification, may not be willing to pay high prices due to their high sensitivity to risk.