According to the textbook,capital and risk are intimately related to each other.

Question

Quizplus · Accepted Answer

Capital and risk are intimately related because the level of risk a company or investor is willing to take on is directly related to the amount of capital they have available. Without enough capital, taking on high-risk investments could lead to financial ruin, while having significant capital allows for more risk-taking opportunities. Additionally, the return on investment is often directly proportional to the level of risk taken on, meaning higher levels of capital can potentially generate higher returns, but also carry a greater level of risk.

According to the Textbook,capital and Risk Are Intimately Related to Each