Understanding Risk/Return Trade-off In Investments: An Essay On Risks And Returns.

The Risk/Return Trade-offRisks stand for the chance that the actual return of the investment would differ from the anticipated return. It is the possibility of losing the potential investment and in certain cases loses the capital as well (Dorfman & Cather, 2012). Higher returns are related with higher risks and vice versa. So the risk/return trade-off would strike for a balance between the desires for the lowest possible risk and the hi…