How is risk related to profit? a The lower the risk, the higher the profit. b Profit has an inverse relationship to risk. c Profit can be seen as a reward for taking risks. d High-risk ventures are more likely to be successful.

How is risk related to profit? a The lower the risk, the higher the profit. b Profit has an inverse relationship to risk. c Profit can be seen as a reward for taking risks. d High-risk ventures are more likely to be successful.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 17.2IP

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Question

How is risk related to profit?

a	The lower the risk, the higher the profit.
b	Profit has an inverse relationship to risk.
c	Profit can be seen as a reward for taking risks.
d	High-risk ventures are more likely to be successful.

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Investments are done to make profit, but such investments come with different degrees of risk.

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