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QuizMultiple Choice

Investing

Question 1 • Personal Finance - EL3403

What is the relationship between risk and return?

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

Explanation

Risk and return are generally related: investments with greater risk often offer the potential for greater returns to compensate investors for taking that risk. This is not guaranteed, but it makes “A higher risk often means a higher return” the best choice. The other choices incorrectly claim the opposite relationship or use “always.”

AI-written and checked against the verified answer.

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