Which of the Following Is True About Risk and Return

question 234

Multiple Choice

Which of the following is true about risk and return?

• A) Riskier assets will, on average, earn lower returns.
• B) The reward for bearing risk is known as the standard deviation.
• C) Based on historical data, there is no reward for bearing risk.
• D) An increase in the risk of an investment will result in a decreased risk premium.
• E) In general, the higher the risk the higher the expected return.

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Definitions:

Utilities Expense

Utilities expense refers to the cost incurred by a business for the consumption of utility services such as electricity, water, and gas.

Accounts Payable

Liabilities or amounts owed by a company to creditors for goods and services that have been purchased on credit but not yet paid for.

Journal

A chronological record where financial transactions are initially recorded using the double-entry accounting system before being transferred to accounts in the ledger.

Chronological Order

This is the arrangement of events, or information, according to the time sequence in which they occurred or were created.