If One Security Has a Greater Risk Than Another Security

question 10

Multiple Choice

If one security has a greater risk than another security, how will investors respond?

• A) They will require a lower rate of return for the investment that has greater risk.
• B) They would be indifferent regarding their expectation of rates of return for either investment.
• C) They will require a higher rate of return for the investment that has greater risk.
• D) None of the above.

---

Definitions:

Painless Process

A procedure or sequence of actions undertaken without causing any physical or emotional discomfort.

Initiate Divorce

The act of beginning the legal process to end a marriage.

Sexual Liaisons

Temporary or casual sexual relationships between individuals.

Early Separation Phase

A period shortly after detachment or parting in processes like developmental stages, relationships, or employment, marked by adaptation and adjustment challenges.