Which of the following risk-return statements is true?
A) an investment in a Government of Canada bond is more risky than an investment in a publicly traded company, such as Nortel Networks
B) rational investors require a lower return for exposing themselves to risk
C) in order to increase the return expected from any kind of investment, we must increase our exposure to risk
D) all of the above are true

Question

Quizplus · Accepted Answer

In finance, there is a fundamental principle that higher returns are associated with higher risk. Therefore, to increase the expected return on an investment, one typically must accept a higher level of risk.

Which of the Following Risk-Return Statements Is True