Investors demand a higher return for investments that have larger fluctuations in values because:
A)they do not like risk.
B)they are risk seeking.
C)they invest for the long term.
D)they are more expensive.
E)they have higher transaction costs.

Question

Quizplus · Accepted Answer

Investors typically demand a higher return for investments with larger fluctuations in value because they are considered riskier. A higher return compensates for the increased risk associated with the investment's volatility.

Investors Demand a Higher Return for Investments That Have Larger