Get the Best Homework Help While Doing The Definition of Risk and Return

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What is the benefit of understanding the definition of risk and return?

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Let us look at the importance of understanding the definition of risk and return-

• Returns are the benefits that we reap from investing in different areas and there can be positive returns as well as negative returns. If the returns are positive, then one can have capital gain or increased income. If there are negative returns, it means losses.
• Risk is the chance that the actual return may vary from the expected return. And risks are generally categorized as systematic and unsystematic risks.
• Finance students should know the golden rule that less risk leads to fewer returns and more risk leads to more returns.
• By understanding the definition of risk and return in a thorough way you can solve complex problems very easily. It will also help you in solving the numerical problems very fast.
• The returns will vary because the risk involved in each investment is of adifferent
• You will gain extensive knowledge on investment strategies that one should follow so that profits can be maximized in the long run by getting adequate returns on the risk that has been optimized.

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