Which Statement Correctly Describes the Relationship Between Risk and Return

question 9

Multiple Choice

Which statement correctly describes the relationship between risk and return?

• A) Risk and return have no relationship.
• B) Risk and return have a positive relationship.
• C) Zero risk instruments have the highest returns.
• D) The lower the risk is, the higher the return is.

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Definitions:

Finance/Accounting

The branch of business that deals with the management of money, including the processes of recording, classifying, and analyzing financial transactions.

Qualifying Sources

The process of evaluating and approving potential suppliers based on specific criteria to ensure they can meet an organization's requirements for quality, reliability, and service.

Post-Transaction Cost

Expenses incurred after a purchase, including handling complaints, returns, and warranty claims.

Total Cost of Ownership

The comprehensive assessment of the complete cost of acquisition and operation of a product or system over its useful life.