The basic relationship between risk and return is that to earn higher returns, one must accept more risk, which is why bonds provide higher returns than stocks.

Question

Quizplus · Accepted Answer

This statement is false. While there is generally a positive relationship between risk and return, it is not always the case that bonds provide higher returns than stocks. In fact, historically stocks have provided higher returns than bonds over the long term. Additionally, there are different types of bonds and stocks, each with their own level of risk and potential return. The relationship between risk and return is complex and depends on various factors such as market conditions, company performance, and investor preferences.

The Basic Relationship Between Risk and Return Is That to Earn