Risk Vs Rewards

A company says it believes its stock will triple in value in the next 6 months.

A stock with very high expected returns like this is probably ...

(a)  

• High Risk
• Low Risk

Reorder the following based on their level of financial risk.

(Low risk to high risk)

• Stock from an established company (Blue Chip stock)

• Stock from a new company.

• Bond from the City of Phoenix

• Mutual Fund managed by an investment firm

• Stock from a company in Syria

Match the following Risk to its appropriate Reward

• (Reward) Collecting Interest

• (Risk) Spending money on research

• (Reward) Improved product quality

• (Risk) Purchasing stocks

• (Reward) Increased productivity

• (Risk) Issuing a loan

• (Reward) Growing wealth

• (Risk) Purchasing capital equipment

Risk is the difference between ​expected rewards and​ (a)   rewards.

• actual
• some
• many
• expensive
• few

In a limited liability company, the owners are _______.

• personally liable for the business debts

• not personally liable for the business debts

• partially liable for the business debts

Who is at the most risk when a limited liability company fails?

(PICK 3)

• investors

• suppliers

• employees

• Owners

Entrepreneurs abandon steady paychecks. They only get paid if the business succeeds. This is known as a ​ (a)   that entrepreneurs accept. 

• risk
• Reward
• Innovation
• Start-up

The greater the risk, the greater the reward.

This concept is known as the ​​ (a)   .

• risk / reward tradeoff
• startup cost
• Mandelbrot Principal
• Risk Conundrum

Pirates attacked well-defended merchant ships in order to steal their cargo. This is an example of what risk/reward principal?

• High Risk & High Reward

• High Risk & Low Reward

• Low Risk & Low Reward

• Low Risk & High Reward

Your parents & grandparents used to go to the "penny arcade". They would put a penny in a machine, and (if they were lucky) the machine would give them a gumball or mint. This is an example of what Risk / Reward principal?

• High Risk & High Reward

• High Risk & Low Reward

• Low Risk & Low Reward

• Low Risk & High Reward