Question

Generally, the lower the perceived risk, the higher the required average anticipated return.

A) True
B) False

Answer 1

The lower the perceived risk, the higher the required average anticipated return.

Step-by-step explanation:

The statement is True.

Generally, the lower the perceived risk, the higher the required average anticipated return. This is because investors demand higher returns to compensate them for taking on more risk.

For example, a low-risk investment like a bank account may have low returns but also carries minimal risk of losing money. On the other hand, a high-risk investment like stocks may have the potential for higher returns, but also a higher chance of losing money.