11
QuizMultiple Choice

Electric Current

Question 11 • *CHS TN-Physical Science

Which statement best describes the relationship between risk and investments?

Answer
A
Stocks in foreign companies are low-risk investments.
B
Government bonds are high-risk investments.
C
Investments with higher risk have guaranteed rates of return.
D
Investments with higher risk have higher expected rates of return.

Explanation

Risk and expected return are generally related: investors usually expect a higher potential return for accepting greater uncertainty and the possibility of loss. This does not guarantee a higher return, so choice C is incorrect. Therefore, the best statement is that investments with higher risk have higher expected rates of return.

AI-written and checked against the verified answer.

Previous
Next