What Is The Relationship Between Financial Risk And Financial Return?


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The relationship between financial risk and return is the gain or lose of from investments or securities. The "risk" denotes that the investor could lose money and the "return" is the profit the investor obtains. If the investors chooses to invest in security that is a low risk then the return will be small. If the security is high risk factor the investor has the potential to get higher returns. The return on an investment can be measured by a real rate which is what is earned after inflation has been figured into the value.

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