In securities markets, there should be a risk-return trade-off with higher-risk assets having ________ expected returns than lower-risk assets.

A) higher
B) lower
C) the same
D) The answer cannot be determined from the information given.

Risk-Return Trade-Off

The principle that potential return on investment increases with the amount of risk undertaken in the investment.

Expected Returns

A projection of the amount of profit or loss an investment is likely to generate, factoring in various probabilities.

Higher-Risk Assets

Refers to investments that carry a greater possibility of losing value but offer a higher potential for financial rewards compared to lower-risk assets.