Which of the Following Is True

question 3

Multiple Choice

Which of the following is true?

• A) Investments with higher risk generally have a higher expected return than risk-free investments.
• B) Investments that pay a return over a longer time horizon generally have less risk.
• C) Investments with a greater variance in the size of the future payoff generally pay a lower expected return.
• D) Risk-free investments are the best benchmark for measuring the risk of all investment strategies.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members from earnings, typically in the form of cash.

Net Income

The amount of money remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Indirect Method

A financial reporting approach used primarily for cash flow statements that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Cash Dividends

Payments made by a company to its shareholders out of its profits or reserves.