April 23, 2024

Risk-Reward Ratio

The Risk-Reward Ratio is a tool used by investors to assess the potential return on an investment relative to the amount of associated risk. This ratio gives a numerical insight into how risky an investment is, allowing investors to make informed decisions about which investments are best suited to their individual needs. By understanding the risk-reward ratio, investors can make smart choices about where to put their money, enabling them to maximize their potential return while minimizing their exposure to risk.

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