When it comes to the matter of investing, would you invest in a particular business if the risk part of it is high but the rewards itself is also very high? Personally i think i would look at the risk factor first, if the risk is something i cannot handle or manage, then there is no need investing no matter the amount of profit i stand to gain.
Risk and rewards
- Thread starter eldavis
- Start date
Risk benefit formula uses not only in business but it also uses in medical profession too as if some medicine causes liver problem in it's side effect but it cure high grade fever then doctor prescribe that medicine because if the patient won't take that medicine then he may fell severely ill. So it's benefit is more as compare to risk.
It is generally advisable to carefully consider the level of risk involved in any investment before making a decision. Investing in a high-risk, high-reward business can potentially lead to significant returns, but it also involves a greater possibility of losing your investment. It's important to evaluate your risk tolerance, financial situation, and investment goals before making any investment decisions. If you feel that the risk is too high for you to handle, it may be best to consider alternative investment options that align better with your risk tolerance.
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The risk-benefit formula is a common tool used in many fields, including medicine, to make decisions about whether to pursue a particular course of action. In medicine, the goal is always to provide the best possible outcome for the patient, and sometimes that means balancing the potential risks of a treatment or medication with the potential benefits it can provide.
My investment appetite is quite conservative. I go for low risk investment. The return of course is not as high as the high risk investment. But I just cannot afford to lose a lot of money.
A very important factor to consider in an investment is the risk-to-reward ratio.
