Companies should under no conditions take actions that increase their risk relative to the market, regardless of how much those actions would increase the firm's expected rate of return.

Question

Quizplus · Accepted Answer

Companies may take actions that increase their risk relative to the market if the potential increase in their rate of return justifies the added risk. It is up to each company to evaluate and manage risk according to their own risk appetite and strategic goals.

Companies Should Under No Conditions Take Actions That Increase Their