Which of the Following Statements About the Riskiness of an Investment

question 18

Multiple Choice

Which of the following statements about the riskiness of an investment is true?

• A) The lower the risk, the higher the discount rate.
• B) The higher the risk, the higher the discount rate.
• C) The higher the risk, the lower the cost of capital.
• D) The higher the risk, the higher the minimum desired rate of return.

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Definitions:

Blacks

Refers to people of Sub-Saharan African descent, often used within the context of discussing racial demographics, culture, or issues of racial inequality.

Masters

Individuals who have control or authority over others, such as in the context of slavery or apprenticeships.

Fugitive Slave Law of 1850

Legislation passed in the United States that required the return of escaped slaves to their owners, even in states where slavery was illegal.