Stock Market · True or False
Is it true that high returns usually come with high risk?
True. Risk and return are generally positively correlated.
The risk-return tradeoff is fundamental — understanding it prevents both the trap of chasing unrealistic returns and the mistake of avoiding all risk.
Expecting high returns with no risk, which leads to falling for scams and get-rich-quick schemes that promise exactly that.
This scenario is one of 155 in the Skillful Stock Market track. Each card states a situation, you decide true or false, and the explanation follows immediately.
- Answer
- True
- Track
- Stock Market
- Topics
- risk-reward, investing-principles
Also asked as
Do high returns come with high risk? Is there a relationship between risk and reward in investing? Why safe investments have lower returns?
The scenario in full
High returns usually come with high risk.
Frequently asked questions
Is it true that high returns usually come with high risk?
True. Risk and return are generally positively correlated.
Do high returns come with high risk?
True. Risk and return are generally positively correlated. The risk-return tradeoff is fundamental — understanding it prevents both the trap of chasing unrealistic returns and the mistake of avoiding all risk.
Is there a relationship between risk and reward in investing?
True. Risk and return are generally positively correlated. The risk-return tradeoff is fundamental — understanding it prevents both the trap of chasing unrealistic returns and the mistake of avoiding all risk.
Why safe investments have lower returns?
True. Risk and return are generally positively correlated. The risk-return tradeoff is fundamental — understanding it prevents both the trap of chasing unrealistic returns and the mistake of avoiding all risk.
Where does this stock market question come from?
It is one of 155 scenarios in the Skillful Stock Market track. Each card states a realistic situation, you decide true or false, and the explanation follows immediately.
How do I practise more questions like this?
Start the Stock Market quiz. It runs about two minutes per session, the first 150 questions are free across every category, and your progress saves automatically.