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
The tenet, of both the efficient frontier, in portfolio analysis and the Capital assets pricing model, is that investors are rational and will only take more risk for more returns.

 

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