Question

Which of the following statements is correct? Assume everything else equal. Group of answer choices Riskier assets always have higher market values. Riskier assets are more valuable than (preferred to) less risky assets. The sooner cash is received, the more valuable it is. Investors generally prefer short-term, high-risk assets investments. Investors generally receive higher returns on investments with low risk than investments with high risk.

Answer 1

Answer:

The sooner cash is received, the more valuable it is.

Explanation:

Finance is based on the premise that the value of money increases as time passes, so if you have $100 today, it is worth more than $100 tomorrow, or at least a very tiny little more.

Considering two securities that have the same maturity value: The security that has the closest maturity date will be worth more.

Also, investors are risk adverse, that means that risky assets generally have a lower price since investors will demand a higher return in exchange for the increase in risk.