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    Risk and Expected Return

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    What is the relationship between risk and expected return, and how do companies employ diversification to reduce risk?

    © BrainMass Inc. brainmass.com December 24, 2021, 5:04 pm ad1c9bdddf

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    The higher the risk of the stock or the security the higher the expected return is. However, the higher the loss is as well. That is why people who invest in risky securities acheive the highest return and they are also very risk prone since they are comfortable with risking a potential large amount of money with ...

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    This solution helps with a problem regarding risk and expected return.