Which of the following statements concerning the required rate of return on stocks is true?

Select one:

a. If risk is reduced, the required return will decrease because more investors are risk-averse.

b. The higher the risk, the higher the required return, other things being equal.

c. The required return on preferred stock is generally higher than the required return on common stock.

d. The higher an investors required rate of return, the higher the value of the stock.