A market risk-return function is a graphical presentation of the discount rates associated with each level of project risk.

Question

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A market risk-return function plots the expected return on an investment against the level of market risk associated with it. It helps investors determine how much return they can expect to receive for taking on a certain level of risk. It is typically presented as a graph where the risk is measured on the x-axis, and the expected return is measured on the y-axis.

A Market Risk-Return Function Is a Graphical Presentation of the Discount