The principle of risk-return trade-off means that A) higher risk inve

The principle of risk-return trade-off means that

A) higher risk investments must earn higher returns.
B) an investor who takes more risk will earn a higher return.
C) an investor who bought stock in a small corporation five years ago has more money than an
investor who bought U.S. Treasury bonds five years ago.
D) a rational investor will only take on higher risk if he expects a higher return.

ANSWER

D