10
QuizMultiple Choice

Principles of Investment — Quiz

Question 10 • CMS 2026-2027 Economics and Personal Finance INITIAL CREDIT

Which statement is true of the relationship between risk and return?

Answer
A
The greater the risk, the lower the potential return.
B
The greater the risk, the greater the potential return.
C
The relationship between risk and return is always the same.
D
The relationship depends on the individual investment.

Explanation

Investments with greater risk generally offer the potential for greater returns as compensation for the chance of losing money. This does not guarantee a higher return; it describes the usual risk-return tradeoff. Therefore, “The greater the risk, the greater the potential return” is true.

AI-written and checked against the verified answer.

Previous
Next