Which suppliers of funds bear the greatest risk and should therefore earn the greatest return?

Suppliers of funds that bear the greatest risk typically include venture capitalists and private equity investors, as they invest in startups and high-growth companies with uncertain outcomes. Additionally, high-yield bond investors face significant credit risk, as they invest in issuers with lower credit ratings. These suppliers require higher returns to compensate for the potential loss of capital associated with their investments in riskier assets. Consequently, the greater the risk, the higher the expected return to attract and reward these investors.