Overview
Risk and return go hand in hand. Understanding this relationship is critical to making well-reasoned financial decisions, whether you are making personal
investment decisions or working for a business where you’re responsible for investing excess cash. This journal assignment allows you to explore the riskreturn relationship in the context of investing in stocks in both of these roles.
Prompt
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 impacts stock investment decisions, using examples to
support your claims.
Reflection: Describe whether you make stock-investment decisions in your personal life and how you do or would make those decisions.
Consider the following in your response: Would your decision-making process change if you needed to make stock-investment decisions for a business? Why
or why not?
