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If One Security Has a Greater Risk Than Another Security

Question 10

Multiple Choice

If one security has a greater risk than another security, how will investors respond?


A) They will require a lower rate of return for the investment that has greater risk.
B) They would be indifferent regarding their expectation of rates of return for either investment.
C) They will require a higher rate of return for the investment that has greater risk.
D) None of the above.

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