Which of the Following Statements About the Relationship Between Rate

question 89

Multiple Choice

Which of the following statements about the relationship between rate of return and risk is true?

• A) A portfolio often provides a higher rate of return for a given level of risk than any individual asset can offer.
• B) Individual assets typically provide higher rates of return than portfolios, given that portfolios are lower risk.
• C) A portfolio often provides a higher rate of return than any other type of savings.
• D) A portfolio is the safer choice and thus provides a lower rate of return than any other type of savings.

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Definitions:

Strategic Decisions

High-level choices that are made by top management to steer an organization towards its long-term goals and objectives.

Performance Incentives

Rewards or bonuses given to employees based on their achievement of specific performance targets or objectives.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives, often involving considerations of risk, benefit, and the impact of the outcome.

Tactical Decisions

Decisions that focus on the short-term strategies and day-to-day operations of a business.