In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with the concept of _____ trade-off.

Question

Quizplus · Accepted Answer

The concept of balancing the opportunity for profit with the potential for loss is known as the risk-return trade-off. This principle suggests that the potential return on any investment is correlated with the amount of risk taken.

In Seeking a Balance Between the Opportunity for Profit and the Potential