Which of the following statements is true? a. While finance teaches that investments with higher risk should

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Question:

Which of the following statements is true?
a. While finance teaches that investments with higher risk should have higher returns there is no historical evidence in the capital markets to suggest this relationship exists.
b. Finance teaches that investments with higher risk should have higher returns and historical evidence in the capital markets suggests this relationship exists.
c. When individuals decide how to invest their money they must weigh the expected benefits (returns) against the costs of additional risk.
d. Both (b) and (c) are true.