Question

what is the relationship between risk and return?
a higher risk often means a higher return.
a lower risk always means a higher return.
a higher risk often means a lower return.
a lower risk will always mean a lower return.

Explanation:

In finance, the fundamental principle is that there is a positive relationship between risk and return. Higher - risk investments have the potential for higher returns because investors demand compensation for taking on more risk. However, it's not a guarantee (hence "often" rather than "always"). Lower - risk investments typically offer lower returns as there is less risk to compensate for.

Answer:

A. A higher risk often means a higher return.