BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -What is Risk-Return Tradeoff? The risk-return tradeoff states that the potential return rises with an increase in risk. Using this principle, individuals associate low levels of uncertainty with low potential returns, and high levels of uncertainty or risk with high potential returns.

Detailed explanation-2: -The risk-return trade-off states that the level of return to be earned from an investment should increase as the level of risk goes up. Conversely, this means that investors will be less likely to pay a high price for investments that have a low risk level, such as high-grade corporate or government bonds.

Detailed explanation-3: -Risk return trade-offs are essential components of investment decisions and assessing the portfolio. Also, it helps analyse the portfolio holdings, their concentration and the appropriate mix to balance risk and return at a portfolio level.

Detailed explanation-4: -In finance, risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.