alleryStart learning →What relationship between risk and reward does the investing world often cite?
AGreater risk brings greater potential reward
BGreater risk always shrinks returns
CRisk and reward move independently
DOnly insured products can gain value
Answer & Solution
Correct answer: A. Greater risk brings greater potential reward
1. It is often said that the greater the risk, the greater the potential reward.
2. Investing accepts more risk than saving precisely to chase that higher potential.
3. The saying describes potential, not a guarantee, which is the nuance exams test.
_Source: "Saving and Investing: A Roadmap to Your Financial Security" (US SEC, public domain), section Investing_
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