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Explain in terms of the risk-return principle

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Two restaurants are on the same block. One has been opened for 10 years and is a thriving business. The other one has been open for only a year. They both want to expand. When the two owners go to the local bank looking for a loan, which one is likely to get a lower interest rate? Explain in terms of the risk-return principle.

Reference no: EM132285521

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