Within the context of working capital management,the risk-return trade-off involves an increased risk of illiquidity lversus increased profitability.

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The risk-return trade-off in working capital management involves balancing the risk of illiquidity (i.e. the inability to meet short-term obligations) with the potential for increased profitability (by investing in assets that generate higher returns). Therefore, there is a direct relationship between risk and return in working capital management.

Within the Context of Working Capital Management,the Risk-Return Trade-Off Involves