In financial management, risk and return represent a crucial trade-off for investors. This concept reflects the balance between potential gains and the associated uncertainty or risk in an investment. Different financial instruments offer varying risk-return profiles, influenced by factors like market, credit, and interest rate risks. Successful portfolio management involves finding the right equilibrium based on an investor's risk tolerance and financial objectives, aiming for optimal returns while mitigating potential downsides.
How to Calculate it?
