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What is an investment risk and how does it impact potential returns on investments?
Investment risk refers to the possibility of losing money or not achieving expected returns on an investment. The level of risk associated with an investment can impact the potential returns - generally, higher risk investments have the potential for higher returns, but also carry a greater chance of loss. Investors must carefully consider their risk tolerance and investment goals when making investment decisions.
What does the historical relation between volatility and return tell us about investors attitude toward risk?
The historical relationship between volatility and return suggests that investors generally seek higher returns as compensation for taking on greater risk. This risk-return tradeoff indicates that assets with higher volatility tend to offer the potential for higher returns, reflecting investors' willingness to accept uncertainty for the chance of greater rewards. Conversely, lower volatility assets typically provide more stable returns, appealing to risk-averse investors who prioritize capital preservation over high returns. Overall, this relationship shapes investor behavior and portfolio strategies based on individual risk tolerance.
What is the meaning of risk tasking?
Risk-taking means taking actions which might have unpleasant or undesirable results.
Which type of investment is NOT easily found in the marketplace?
low risk, low returnsmedium risk, medium returnshigh risk, high returnslow risk, high returnsthe answer is LOW RISK, High RETURNS
Difference between risk and return?
Risk is the possibility of loss by unforseen happenings. it may be categorised as monetary and non- monetary. in financial parlance risk is the possiblity of loss in your investments made (either the capital u had invested, returns or both). return is the expected value from an investment which has a risk associated with it. for ex: investing in stock market has a equity risk involved with it. generally returns are based on risk levels. higher the risk higher the return and the vice versa
Why law of diminishing returns is considered a short-run phenomenon?
why law of diminishing returns is considered a short-run phenomenon?
What war the 3 stages of production?
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
What are the stages of production of a firm?
a]increasing marginal returns b]diminishing returns c]negative returns
Definition of overexploitation?
Exploitation to the point of diminishing returns.
What is increasing input with reduced output?
Diminishing returns.
Why isoquants convex to the origin?
law of diminishing returns
Who is responsible for law of diminishing returns?
Thomas Malthus
What offsets the law diminishing returns?
technical innovation
Who is responsible for the law diminishing returns?
Thomas Malthus
Who is responsible for the law of diminishing returns?
Thomas Malthus
Explain how the diminishing returns influences the shape of the variable cost and total cost curves?
how diminishing returns influences the shapes of the variable-cost and total-cost curves
The importance of the law of diminishing returns?
The law of diminishing returns helps managers maximize their profits. At the point where their costs begin to rise, they can switch to another product to make more money.
