What Is the Risk-Return Trade-Off

question 161

Multiple Choice

What is the risk-return trade-off?

• A) Assets with the least risk tend to outperform the market.
• B) To invest in less risky assets means higher returns.
• C) Bonds earn higher returns than stocks because bonds are riskier.
• D) To earn higher rates of return, a person must accept higher risk.

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Definitions:

Chromatism

The quality or state of being chromatic, which involves the use of color or the ability to produce color, often used in the context of art and music to denote vividness and diversity in color or tone.

Still Life

A picture depicting an arrangement of inanimate objects.

Francisco de Zurbarán

A Spanish painter of the Baroque period known for his religious paintings, still lifes, and for his depictions of monks and saints.

Juan Sánchez Cotán

A Spanish Baroque painter, renowned for his pioneering and highly realistic still life paintings.