4
QuizMultiple Choice

Investing — Quiz

Question 4 • Personal Finance and Economics

What is the relationship between risk and return?

Answer
A
A higher risk often means a higher return.
B
A lower risk will always mean a lower return.
C
A higher risk often means a lower return.
D
A lower risk always means a higher return.

Explanation

In general, investments with higher risk offer the potential for higher returns to compensate investors for taking on more uncertainty. This is not guaranteed: a risky investment can also lose value. Therefore, “a higher risk often means a higher return” is the best choice.

AI-written and checked against the verified answer.

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