Financial Managers Who Have a Good Understanding of the Risk­return

Multiple Choice

Financial managers who have a good understanding of the risk­return tradeoff know that sources and uses of funds that offer:

A) higher rates of return always prove to be beneficial for a company.
B) neither lower rates of return nor higher rates of return expose companies to risk.
C) lower rates of return are riskier than those that offer higher rates of return.
D) higher rates of return are riskier than those that offer lower rates of return.