According to the risk-return ratio, which of the following statements is correct?
A) Decisions involving higher risk should yield higher returns.
B) Decisions involving lower risk should yield higher returns.
C) Decisions involving more risk should yield fewer returns.
D) Decisions involving high risk should yield more predictable returns.

Question

Quizplus · Accepted Answer

The risk-return ratio states that there is a positive relationship between risk and return, meaning decisions involving higher risk should yield higher returns. However, this is not a guarantee and there is always the potential for higher risk decisions to result in lower returns.

According to the Risk-Return Ratio, Which of the Following Statements