The ________ average return on stocks as compensation to investors for the ________ risk they are taking.

Question

Quizplus · Accepted Answer

The higher average return on stocks compensates investors for the greater risk they are taking. This is because stocks are generally more volatile and have a higher level of risk compared to other investments such as bonds or cash. Therefore, investors require a higher return to compensate them for this additional risk.

The ________ Average Return on Stocks as Compensation to Investors