The higher the risk of an investment project,the ________ for the project.

Question

Quizplus · Accepted Answer

When the risk of an investment project is higher, investors require a higher return to compensate for the risk involved. This means that the minimum desired rate of return will be higher. A lower desired rate of return would not provide enough compensation for the higher risk associated with the investment. Thus, the best choice is B, higher the minimum desired rate of return.

The Higher the Risk of an Investment Project,the ________ for the Project