A positive relationship between expected return and expected risk is consistent with
A) investors being risk seekers.
B) investors being risk avoiders.
C) investors being risk averse.
D) all of the above.
E) none of the above.

Question

Quizplus · Accepted Answer

Investors being risk averse implies they require higher expected returns to compensate for taking on higher risk, which aligns with a positive relationship between expected return and expected risk.

A Positive Relationship Between Expected Return and Expected Risk Is