Risk/return factor (risk/reward profile)

By | 2017-09-13T15:31:23+00:00 13th September 2017|

The risk/return factor is the relationship between an investment’s potential return and its likelihood or probability of losing value. Potential return should rise with an increase in risk in principle. Low levels of uncertainty (low risk) are associated with low potential returns, whereas high levels of uncertainty (high risk) are associated with high potential returns.