There is an inverse relationship between the risk of a security being valued and the required rate of return for the security.

Name: There is an inverse relationship between the risk of a security being valued and the required rate of return for the security.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The relationship between the risk of a security and the required rate of return is direct, not inverse. Higher risk securities typically require a higher rate of return to compensate investors for taking on additional risk.

There Is an Inverse Relationship Between the Risk of a Security