risk versus reward

Risk-Return Trade-Off

The concept that every rational investor, at a given level of risk, will accept only the largest expected return. That is, given two investments at the exact same level of risk, all other things being equal, every rational investor will invest in the one that offers the higher return. The risk-return tradeoff is pervasive throughout economics and finance. It is the reason that riskier bonds pay higher coupons than other bonds. It is also the reason that bonds pay lower returns than most stocks because they are a less risky investment. The Markowitz Portfolio Theory attempts to mathematically identify the portfolio with the highest return at each level of risk. See also: Markowitz Efficient Portfolio.

risk versus reward

A financial analysis comparing the potential gains from a project or property against the potential losses.The greater the risk,the greater the reward should be.

References in periodicals archive ?
The risk versus reward could be phenomenal for investors"
Of course, this is where the risk versus reward tradeoff comes in.
Hence, contractors and subcontractors should not forget to weigh risk versus reward before entering into commitments, as contracts create legally-enforceable obligations.
The conventional wisdom of managing income effectively, particularly among high net-worth individuals, as well as the issue of tactical investment allocation in terms of risk versus reward was also reiterated.
In their study, the researchers recommend that any potential entrepreneur keep the risk versus reward of any venture in mind, and evaluate the chances that their start-up may succeed.
As you might expect, the products that have less potential to give rise to a loss usually offer lower potential returns and this is part of the risk versus reward balance present every time we invest.
It is all about risk versus reward, and clearly the reward is outpacing all of the risks," said a Dubai-based trader.
While a favorable assessment of risk versus reward may continue to add momentum to U.
Thought leaders who are experts in measuring and managing IT-enabled services formed the CSMIC SMI management program to meet the need for enterprise-wide standards for calculating risk versus reward of cloud computing services.
Now you can experience true risk versus reward on every hole and find out if you have the mind to manage the course correctly and take the right risks at the right time.
It's a classic swing of risk versus reward," said Chris Speller, Group Director for CityscapeIn addition to the Real Estate Investment and Development Conference, Cityscape Global will also host the World Architecture Congress (WAC) and Retail City conference.
Supported by the company's marketing machine, operational guidance and 15-year track record, budding entrepreneurs balance risk versus reward and make the move into business ownership.