Business Finance
BUS401 Ashford University Risk and Return Tradeoff Paper

bus401

ashford university

Question Description

Risk-Return Tradeoff
From Title: Fundamental Concepts in Financial Management

Critically reflect on the importance of the risk and return balance. Consider the following:

  • Can we ever have any return without some type of risk?
  • If you take on a large risk, are you guaranteed a large return? Why or why not?
  • What other factors play into risks that are not covered in the video?
  • When have you had to consider risk and return in personal or professional decision-making?

Final Answer

Attached.

Running head: RISK AND RETURN

1

Risk and Return
Students’ Name
Institutional Affiliation

RISK AND RETURN

2
Risk and Return

Worth a note, a risk entails a possible loss which could be referred as the variability of
possible returns in an investment scenario. On the other hand, return refers to the portion you
may earn or lose from the investment. Important to note, the common risks in investment are
interest rates or currency prices, changes in inflation and liquidity, financial losses, tax risks,
model risk, business risk (Christensen, Nielsen, & Zhu, 2015). Therefore, the balance between
highest possible return and the lowest possible uncertainty is referred to as the risk-return
tradeoff.
Can We Ever Have Any Return Without Some Type Of Risk?
Notably, there is no investment that can be termed as risk-free but the levels of
uncertain...

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