The reason why managers make out that trade-off exists between returns and risk and even the reason why this trade-off exits. Introduction: Risk refers to the movement or fluctuation in the value of an investment in the business. The movement can be positive or negative. A positive fluctuation in the price benefits the investor. The investor will lose money if the price movement in negative. Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

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Chapter 1.2, Problem 1.6RQ

Summary Introduction

To discuss: The reason why managers make out that trade-off exists between returns and risk and even the reason why this trade-off exits.

Introduction:

Risk refers to the movement or fluctuation in the value of an investment in the business. The movement can be positive or negative. A positive fluctuation in the price benefits the investor. The investor will lose money if the price movement in negative.

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

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