What is the relationship between risk and return? A higher risk often means a higher return. A lower risk always means a higher return. A higher risk often means a lower return. A lower risk will always mean a lower return.

Question

Ariel Castro

Social Studies

21 November, 15:11

What is the relationship between risk and return? A higher risk often means a higher return. A lower risk always means a higher return. A higher risk often means a lower return. A lower risk will always mean a lower return.

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Answers (2)

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Jimmy Collier · Answer 1

Jimmy Collier 21 November, 15:20

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hi friend thy answer would be A

Willow Wolfe · Answer 2

A higher risk often means a higher return

Explanation:

According to Risk-Return trade off, the higher the risk of investment, the higher the rate of return, and the lower the risk of an investment, the lower the return. It is a trade off often faced be investors. In other words, it is an idea or concept in which the rate of returns in investment increases, as the rate of risk involved in such investment increases.

For Example: Stock with its volatile nature, has proven over time to have higher potential returns, compared to other form of investments such as money market mutual funds and certificate of deposit, which has lesser risk and in turn produces lesser returns.