Asked by Marina Castelluzzo on Apr 28, 2024
Verified
The lessons from capital market history tell us that there is a reward for bearing risk.
Capital Market History
The historical trends and events involving the trading of securities, affecting the structure and behavior of the capital market.
Bearing Risk
The action or practice of assuming the potential for loss or danger in a financial operation or investment.
- Understand the connection between risk and anticipated returns, including how efficiency influences returns.
Verified Answer
SQ
Salma QureshiMay 02, 2024
Final Answer :
True
Explanation :
Historically, investors who have taken on more risk, particularly by investing in stocks (equities) as opposed to safer assets like government bonds, have tended to achieve higher returns over the long term. This is known as the risk-return tradeoff.
Learning Objectives
- Understand the connection between risk and anticipated returns, including how efficiency influences returns.
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