Which of the following statements regarding the risk-return relationship is most accurate?

Question

Quizplus · Accepted Answer

The most accurate statement regarding the risk-return relationship is that higher credit scores are associated with lower APRs. This is because lenders view individuals with higher credit scores as less risky borrowers, and therefore are willing to lend to them at lower rates. Option A is incorrect because lower credit scores are associated with higher APRs. Option C is incorrect because longer loan length is associated with higher APRs, as there is more time for the borrower to default on the loan. Option D is incorrect because shorter loan length is associated with lower APRs, as there is less time for the borrower to default on the loan. Option E is incorrect because only statement B is accurate.

Which of the Following Statements Regarding the Risk-Return Relationship Is