Question

Saying that Risk and Return go hand in hand, tells us that you ________ as the length of the investment horizon ________." A. can afford to take on additional risk; increases B. can afford to take on additional risk; decreases C. should never take on additional risk; increases D. should always take on additional risk; decreases

Answer 1

A. can afford to take on additional risk; increases

Step-by-step explanation:

Saying that Risk and Return go hand in hand, tells us that you can afford to take additional risk as the length of the investment horizon increases. Increasing the length of the investment horizon increases the ability to take on additional risk because in the long run the investment pays off while it may be choppy in the short time horizon.