How are return on investment and risk related?

Higher potential return usually comes with higher risk.

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  1. Higher potential return usually comes with higher risk ✔
  2. Higher return always means lower risk
  3. Risk has no effect on return

Why: Investments with higher potential returns generally carry higher risk of loss.

Huh, didn't know that: Investments with higher potential returns generally carry higher risk of loss.

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References

Answer: Higher potential return usually comes with higher risk. Investments with higher potential returns generally carry higher risk of loss.

  1. Scouting America: Personal Management www.scouting.org/merit-badges/personal-management
    The concepts of return on investment and risk and how they are related
    Checked 2026-11-07.

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