5
QuizMultiple Choice

Smart Investing and Financial Decision-Making — Quiz

Question 5 • Personal Finance

Why do higher returns usually involve higher risk?

Answer
A
Greater uncertainty increases potential outcomes
B
Returns are guaranteed
C
Risk removes growth
D
Risk reduces profit

Explanation

Greater uncertainty means investment outcomes can vary more, including the possibility of larger gains as well as losses. That potential for higher outcomes is why higher expected returns usually come with higher risk; returns are not guaranteed.

AI-written and checked against the verified answer.

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