Which statement correctly describes the relationship between risk and return?
A) Risk and return have no relationship.
B) Risk and return have a positive relationship.
C) Zero risk instruments have the highest returns.
D) The lower the risk is, the higher the return is.

Question

Quizplus · Accepted Answer

Risk and return have a positive relationship, meaning that higher levels of risk are typically associated with higher potential returns. However, this relationship is not always linear and individual investments may deviate from this trend. It is important for investors to weigh the potential rewards against the potential risks when making investment decisions.

Which Statement Correctly Describes the Relationship Between Risk and Return