The Basic Relationship Between Risk and Return Is That to Earn

question 35

True/False

The basic relationship between risk and return is that to earn higher returns, one must accept more risk, which is why bonds provide higher returns than stocks.

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Definitions:

Drawee

The party directed by a drafter (e.g., the issuer of a check) to pay a certain sum of money to the party named in the document.

Dishonored

In relation to financial transactions, it refers to the refusal of payment on a check, note, or bill when presented.

Bill of Exchange

A bill of exchange is a written order used primarily in international trade that binds one party to pay a fixed amount of money to another party at a predetermined date or on demand.