Difference between revisions of "Introduction to entrepreneurship/IENT101/Nature/Risk"
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Anyone thinking about starting a new business or venture of any kind needs to think about possible risks and reward. | Anyone thinking about starting a new business or venture of any kind needs to think about possible risks and reward. | ||
| − | * Risk can be defined as the chance of loss. Generally, the higher the risk, the higher the potential for loss. | + | * Risk can be defined as the chance of loss. Generally, the higher the risk, the higher the potential for loss. <ref>www.stlouisfed.org/education_resources.</ref> |
| − | * A Reward is a positive incentive that makes people better off. | + | * A Reward is a positive incentive that makes people better off. <ref>www.stlouisfed.org/education_resources.</ref> |
| − | There is usually a direct relationship between the risk of a loss and the expected rate of return. The higher the risk of loss, the greater the potential reward. Conversely, the lower the risk of loss, the lower the potential reward | + | There is usually a direct relationship between the risk of a loss and the expected rate of return. The higher the risk of loss, the greater the potential reward. Conversely, the lower the risk of loss, the lower the potential reward. |
Revision as of 23:17, 2 October 2018
Anyone thinking about starting a new business or venture of any kind needs to think about possible risks and reward.
- Risk can be defined as the chance of loss. Generally, the higher the risk, the higher the potential for loss. [1]
- A Reward is a positive incentive that makes people better off. [2]
There is usually a direct relationship between the risk of a loss and the expected rate of return. The higher the risk of loss, the greater the potential reward. Conversely, the lower the risk of loss, the lower the potential reward.
Cite error: <ref> tags exist, but no <references/> tag was found
