Generally the Higher the Risk Involved in an Activity, the ________

question 344

Multiple Choice

Generally the higher the risk involved in an activity, the ________ the rate of return expected by investors.

• A) higher
• B) lower
• C) more stable
• D) less frequent

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Definitions:

Interest Rate Differential

The difference in interest rates between two distinct economic or financial instruments.

Exchange Rate

The price of one currency in terms of another, crucial in international finance as it determines how much one currency is worth in another.

Political Risk

The risk of losing money due to changes in a country's political environment or policy.