Under no conditions should companies take actions that increase their risk relative to the market,regardless of how much those actions would increase the firm's expected rate of return.

Question

Quizplus · Accepted Answer

This statement is not necessarily true. Companies may take actions to increase their risk if they believe it will also increase their expected rate of return, especially if they have a higher risk tolerance than the overall market. However, companies should always carefully evaluate and manage their risk, rather than taking reckless or uninformed actions.

Under No Conditions Should Companies Take Actions That Increase Their