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Understanding Risk and Return Quiz

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1. What is the definition of risk in finance?

2. What is the correlation between risk and return in investment?

3. Which type of risk can be eliminated through diversification?

4. What principle explains why investors need to be compensated for taking on more risk?

5. In the context of investing and finance, what does the term 'return on investment' refer to?

6. Which investment has the highest risk?

7. Which of the following statements is correct regarding the risk of an investment portfolio?

8. What type of risk is associated with changes in market interest rates?

9. What is meant by 'return' in finance?

10. Which type of risk is commonly associated with stocks and bonds?