The compensation for bearing more risk in owning an asset is a higher rate of return for the asset.

Name: The compensation for bearing more risk in owning an asset is a higher rate of return for the asset.
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This is a fundamental principle in finance that investors demand compensation (in the form of a higher rate of return) for bearing more risk in their investment portfolio. The higher the risk, the higher the expected return.

The Compensation for Bearing More Risk in Owning an Asset