ECONOMICS
DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lower the risks, the easier th decision
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We nee dot avoid taking decisions as much as possible
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Higher the risks, the greater th reward
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The implementation of plans lead to greater risks
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Detailed explanation-1: -The risk-reward ratio is a measure of potential profit to potential loss for a given investment or project. A higher risk-reward ratio is generally preferable because it offers the potential for a greater return on investment without undue risk-taking.
Detailed explanation-2: -“No risk, no reward. No pain, no gain.” – Every school sports coach I’ve ever heard.
Detailed explanation-3: -Risk-Reward Concept For bearing that risk, you expect a return that compensates you for potential losses. In theory, the higher the risk the more you should receive for holding the investment, and the lower the risk, the less you should receive, on average.
Detailed explanation-4: -It is generally true that the greater the risk a person takes, the greater the reward he or she will receive if the investment makes money. On the other hand, if an investor only takes a small risk, he or she is likely to earn a small reward. This principle is called the risk/reward trade-off.