For Any Given Financial Asset, Risk Levels and Average Expected

question 100

Multiple Choice

For any given financial asset, risk levels and average expected rates of return are

• A)independent of each other.
• B)negatively related because assets with higher average expected rates of return sell for higher prices, which are inversely related to risk.
• C)positively related because both are inversely related to the rate of inflation.
• D)positively related because investors must be compensated for taking greater risks.

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Definitions:

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A term used to describe a contract or agreement that is so unjust or overwhelmingly one-sided in favor of one party that it is deemed unenforceable under the law.

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