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7 November, 13:46

How is the potential rate of return on investments related to the level of risk?

A) There are risks and benefits to all investments.

B) Higher risk investments have a higher potential return.

C) The rate of return can depend on fees, tax deferrals, and exemptions.

D) Risky investments have a lower rate of return than more stable investments.

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Answers (2)
  1. 7 November, 16:27
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    Answer is B; got it right on USA test prep
  2. 7 November, 17:29
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    The correct answer is letter B.

    Explanation: The return on investment should be commensurate with the risk involved. Risk is a measure of the volatility of future earnings returns.

    Volatility is a quantity of fluctuations that occur with a series of numbers when they deviate from a representative series.
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