Risk and return

 

 

 

Risk and return go hand in hand. Understanding this relationship is critical to making well-reasoned financial decisions, whether you are making personal investment decisions or working for a business where you’re responsible for investing excess cash. This journal assignment allows you to explore the risk-return relationship in the context of investing in stocks in both of these roles.

 

Write a journal discussing risk and return as it relates to investing in stocks.

Specifically, you must address the following rubric criteria:

Investment Risk: Explain key risks associated with investing in stocks.
Investment Return: Discuss events that can cause the price of a stock to increase or decrease.
Risk-Return Relationship: Explain the relationship between risk and return and how this relationship impacts stock investment decisions, using examples to support your claims.
Reflection: Describe whether you make stock-investment decisions in your personal life and how you do or would make those decisions.
Consider the following in your response: Would your decision-making process change if you needed to make stock-investment decisions for a business? Why or why not?

 

 

Sample Solution

Investment risk is an important factor to consider when investing in stocks as it can have a significant impact on the amount of return an investor will receive. Key risks associated with stock investments include market volatility, liquidity risk, and exchange rate risk (Liang et al., 2020). Market volatility refers to the fluctuation of stock prices due to changes in demand or supply, while liquidity risk is related to the difficulty in selling an asset quickly at its current market value. Exchange rate risk relates to fluctuations in foreign currency values which can lead to losses if not properly managed (Gitman & Zutter, 2019).

When it comes to investment return, there are several events that can cause a stock’s price to increase or decrease. For example, positive news about a company such as new product launches or merger announcements may cause investors to buy up shares which drives up the price (Ong et al., 2018). Conversely, bad press such as lawsuits or negative earnings reports could lead investors sell off their positions driving down the price (Lee & Wonnacott 2016). Additionally, macroeconomic factors such as inflation rates and interest rates also play a role in how individual stocks perform over time.

Therefore it is clear why it is important for investors to understand both the risks and potential rewards associated with investing in stocks before making any decisions.

 

The Definition of Love

As the word reference includes new words every year and alters the definition, we saw a move in the meaning of adoration. Today, the meaning of adoration that is commonly acknowledged is “energetic scene” (Webster). This idea of adoration starts with delineation in Hollywood Media, prompting the loss of history and the genuine significance of that word. Love is characterized as “compelling feelings to family members and family members” and “feelings dependent on applause, benevolence, or regular intrigue” (Webster), yet the ongoing definition is generally like what is by all accounts the fascination of Hollywood It is.

Meaning of adoration The meaning of affection is typically the feeling being investigated in reasoning, religion, writing, as sentimental love, club for other people, or love for God as characterized in the Encarta Encyclopedia. At the point when I looked into definitions through the Internet, books and articles, I saw that the definitions changed altogether, yet they have a similar essential comprehension. – Since the word reference includes new words each year and alters the definition, we saw a move in the meaning of adoration. Today, the meaning of affection that is commonly acknowledged is “energetic scene” (Webster). This idea of affection begins with portrayal in Hollywood media, prompting the history and genuine importance of lost words.

What is the meaning of adoration? A conventional definition shows that adoration is a compelling feeling, beguile realized by sexual want, and energy or love. These definitions are right, yet the words have a more profound importance The words have feelings, decisions, or even perspective. Love is superb; regardless of whether you attempt it is unthinkable, you can not live without it. Indeed, even a youngster’s toy, a pet, a notable individual, everybody has something profound, so it is difficult to live without adoration. For instance, kids have most loved toys and covers, and youngsters like their “sheltered ones”. Regardless of whether it’s anything but a living thing, they will have solid emotions against it. Realizing that the proprietor likes it will cause creatures to feel secure, recapture regard and make their proprietors safe. This time we entered the adoration for others for another sex.

 

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