Which of the following statements is most correct?

Question

Quizplus · Accepted Answer

This is a commonly accepted principle in finance called the "risk-return tradeoff." Investors generally expect to be compensated with a higher return for taking on greater risk, but when choosing between two investments with the same level of risk, they will choose the one with the higher return. Choice A is incorrect because it suggests that investors would prefer a lower return for a riskier investment, which goes against the risk-return tradeoff principle. Choice C is incorrect because it suggests that investors prefer higher risk even if the expected returns are the same, which is not necessarily true. Choice D is incorrect for the same reason as Choice B, but it presents the opposite preference.

Which of the Following Statements Is Most Correct