The risk-return relationship means

Question

Quizplus · Accepted Answer

The risk-return relationship states that the higher the risk of an investment, the higher the potential return. This is because investors require a greater potential return to compensate them for taking a higher risk. Therefore, choice C is the correct answer. The other choices are incorrect as they suggest either a negative correlation between risk and return (Option D) or an inverse relationship where lower risk results in higher returns (Option A).

The Risk-Return Relationship Means