A pervasive tradeoff in financial markets relates risk to expected returns. Which of the following statements reflects this relationship?
a. The higher the risk of an asset, the lower the expected return on the asset.
b. There is usually no relationship between risk and return.
c. The higher the risk of an asset, the higher the expected return on the asset.
d. The return on an asset is normally positively related to the risk of comparable assets.
e. The return on a risky asset cannot be compared with the return on a risk free asset.
c
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An increase in the demand for loanable funds will occur if there is
A) an increase in the real interest rate. B) an increase in the nominal interest rate accompanied by an equal increase in inflation. C) a decrease in the real interest rate. D) an increase in expected profits from firm investment projects.
"Pricing-to-market" is a business practice that was common in the twentieth century, but has now all but disappeared
Indicate whether the statement is true or false