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The higher the _____ that future earnings may not be achieved, the higher the return on investment investors demand.

User Vimes
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If there is a higher risk on future earnings, then the return needs to be high to meet these risks. Safer stocks tend to have lower rates of return, but are more likely to meet their earnings goals. Stocks with these higher risks inherent will also tend to bring returns that far outstrip these safe investments.
User Hena
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