Proper risk-return management for a firm means that
A) the firm should take as few risks as possible.
B) the firm must determine an appropriate trade-off between risk and return.
C) the firm should earn the highest return possible.
D) the firm should value future profits more highly than current profits.

Question

Quizplus · Accepted Answer

The correct approach to risk-return management involves finding a balance between the level of risk and the potential return. This means assessing how much risk is acceptable for the expected return, rather than avoiding risk entirely, seeking only the highest returns, or prioritizing future profits over current ones.

Proper Risk-Return Management for a Firm Means That