The risk-return principle implies that the more risky a given course of action, the higher the expected return must be.

Name: The risk-return principle implies that the more risky a given course of action, the higher the expected return must be.
Brand: Quizplus
Rating: 4.8 (33 reviews)

Question

Quizplus · Accepted Answer

This principle states that investors demand higher returns for taking on higher levels of risk in their investment decisions. So, the higher the risk, the higher the expected return should be to attract investors.

The Risk-Return Principle Implies That the More Risky a Given