The risk of an investment can be measured by observing how volatile the return of that investment has historically been over a period of time.

The risk of an investment can be measured by observing how volatile the return of that investment has historically been over a period of time.

Return on investment is directly related to risk of investment--the riskier an investment is, the more you have to pay people for making it.

The two main parameters are:

* Returns - Amount of returns we can expect on the investment * Safety/Risk - How risky the investment is.

Generally risk and returns are directly proportional. Higher the risk on investment, higher would be the return on investment.

An investment.