Question

What is true about the risk and return of an investment? !PLEASE HURRY! Lower-risk investments offer the potential for a higher return. The best way to determine the total risk of an investment is to review the return it offers. Time is the most important consideration, so the investment risk has little impact on the return. Higher-risk investments offer the potential for a higher return.

Answer 1

Answer: Higher-risk investments offer the potential for a higher return.

Step-by-step explanation:

Higher risk ventures usually offer high returns as opposed to lower risk ventures. This is because investors demand a higher return for taking on higher risk when they invest.

For example, a US T-Note is not as risky a corporate bond and will offer a return/yield of 2% for instance. However, the Corporate bond will be more risky and so to get investors interested will offer a 6% return to compensate them for taking the higher risk.