Question

When it comes to investing, what is the typical relationship between risk and return?

Answer 1

In order to run a business and become an entrepreneur, a person must have the capability to take and bear risk. Risk bearing is a key to any business. 

While investing, there is no balance in the ratio of risk and return. The probability of risk is more than that of return. 

Risk is the probable amount of loss the business might have to face. While, return is the amount of revenue the business may earn.

Answer 2

Answer:

Generally, the higher the potential return of an investment, the higher the risk. There is no guarantee that you will actually get a higher return by accepting more risk. Diversification enables you to reduce the risk of your portfolio without sacrificing potential returns.