Question

Generally speaking, the _______ the risk, the _______ the potential return or loss

Answer 1

Low levels of uncertainty (low-risk) are associated with low potential returns, whereas ... Generally speaking, a diversified portfolio reduces the risks presented by individual ...

Answer 2

Low risks are associated with lower returns.

We can give an example of a government bond which has a lower risk but lower returns.

The higher the risk the higher the return or loss.

A risky investment portfolio is associated with higher returns if the results turn positive.

However if the results turn negative it will be a huge loss.

Therefore the correct answer is :

The higher the risk the greater the potential return or loss.