If one security has a greater risk than another security, how will investors respond?

If one security has a greater risk than another security, how will investors respond?         
a.     They will require a lower rate of return for the investment that has greater risk.
b.     They would be indifferent regarding their expectation of rates of return for either investment.
c.     They will require a higher rate of return for the investment that has greater risk.
d.     None of the above.

 

Solution