asked 59.1k views
5 votes
Explain the relationship between risk and rate of return. How does this relationship connect to diversification?

asked
User Cmxl
by
7.7k points

1 Answer

3 votes
Think of lottery tickets for example. They involve a very high risk of losing your money and the possibility of an extremely high reward, with a giant check with a whole lot of zeroes. Or penny stocks: They were also very risky and yet seemed so full of amazing potential. I hope this help's you. Good luck!!
answered
User Amrit Sharma
by
7.7k points

No related questions found

Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.