The Higher the Possible Outcomes Fall from the Expected Outcome

question 79

True/False

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

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Definitions:

3-Month Note

A short-term financial instrument that matures or is due for payment within three months from the issue date.

Maturity Value

The total amount payable to an investor at the end of a fixed-term investment, including principal and any accrued interest.

Discounted Note

A debt instrument sold for less than its face value that will pay the face value at maturity.