Overview
Risk and return go together. You must understand this relationship to make informed financial decisions. This applies when you make personal investment decisions or when you’re investing excess cash for a business. In this journal assignment, you will explore the risk-return relationship when investing in stocks in both of these roles.
Directions
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 affects stock-investment decisions. Use examples to support your claims.
- Reflection: Describe how you would make stock-investment decisions in your personal life. Also talk about how your decision-making process might change if you needed to make stock-investment decisions for a business.
What to Submit
Your submission should be a 4- to 5-paragraph Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.