The Principle of Finance That "Lower Returns Are Expected for Taking

question 25

True/False

The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk.

---

Definitions:

Hostile Attribution Bias

The tendency to interpret others’ behaviors or intentions as having hostile or aggressive motives, often leading to aggressive responses.

Worst in People

Refers to the tendency to bring out or focus on the most negative aspects or traits in others, often due to cynicism or pessimism.

Downside to Extraversion

The potential negative aspects of being extremely outgoing, such as overcommitment or superficial relationships.

Risk Taking

The act or practice of undertaking actions that involve danger or risk in order to achieve a desired outcome.