Question

What is the relationship between return and risk? *
a. Investments with high returns are lower risk.
b. Investments with low risk have lower returns.
c. Investments with low returns are higher risk.
d. There is no relationship between return and risk

Answer 1

In general terms, the relationship between return and risk is that "b. Investments with low risk have lower returns," since the lower risk means that more people will usually invest. 

Answer 2

Answer:

b. Investments with low risk have lower returns.  

Explanation:

If you're eyeing the market and looking for applications with above-average returns, it's good to stay tuned for a fundamental point: risk and return!

That's right: the relationship between risk and return is direct. In other words, it is impossible to make a lot of money in the stock market at low risk! So the obvious conclusion could be: to earn more, just increase the risk. So in the perfect world, you would choose the desired risk and receive the expected return.

First, you have to keep in mind that in order to attract investments, higher risk assets need to offer the possibility of higher returns. Then, it is essential to know that the stock market does not have a ready solution for the risk / return ratio, since it presents a number of variables as fundamentals and flows. In this way, there is no guarantee of earnings. To know the risk of a particular action, it is essential to know your risk and return history. Thus, you can evaluate the performance of the investment.