The Higher the Possible Outcomes Fall from the Expected Outcome

question 66

True/False

The higher the possible outcomes fall from the expected outcome of an investment, the higher the risk and the lower the required rate of return by investors.
The higher the risk, the higher the consequent required rate of return.

---

Definitions:

Red Nuclei

Midbrain structures involved in motor coordination, notably part of the pathway for voluntary movements.

Auditory Pathways

The neural pathways that carry auditory information from the ears to the brain for processing and interpretation.

Motor Activities

Physical actions and movements generated by the muscle systems under control of the nervous system.

Sensory Information

Data obtained from the environment by sensory receptors, then transmitted to the brain for processing and response.