Which of the following is true?
A) Risky assets on average do not earn a risk premium.
B) There is a reward for bearing risk, on average.
C) On average, the greater the risk, the lower the reward.
D) When comparing the common stock of two firms, the riskier one will have the lower price.
E) If a market is not efficient, then all assets in that market will have the same reward to risk ratio.

Question

Quizplus · Accepted Answer

Assets that are considered risky typically offer a risk premium as compensation for bearing that risk. This is a fundamental principle of investment theory, suggesting that investors require higher returns for taking on more risk.

Which of the Following Is True