Which one of the following is a correct statement concerning risk premium?
A) The greater the volatility of returns, the greater the risk premium.
B) The lower the volatility of returns, the greater the risk premium.
C) The lower the average rate of return, the greater the risk premium.
D) The risk premium is not correlated to the average rate of return.
E) The risk premium is not affected by the volatility of returns.
Correct Answer:
Verified
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