A general rule in choosing among alternative investments is the greater the risk taken,the
A)greater the return required.
B)lower the potential expected.
C)greater the price of the investment.
D)lower the profits expected.

Question

Quizplus · Accepted Answer

This is known as the risk-return tradeoff. Investors generally require a higher rate of return on their investments if there is a higher risk involved. Therefore, the greater the risk taken, the greater the return required.

A General Rule in Choosing Among Alternative Investments Is the Greater