The Concept of Risk and Return in Daily Decision-making Processes

Risk/Return Relationship and Cost of Capital
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Risk/Return Relationship and Cost of Capital
This discussion will explore the application of the concept of risk and return in the decision-making processes, its trade-off, and how a proposed initiative to diversify current holdings will factor into the discussion about the total risk for the organization.
Risk and Return in Daily Decision-Making Processes
Applying the concept of risk and return is premised on the understanding that the two will tie in. Every investment has an element of risk and return. In the decision-making process, a finance manager will seek to reduce the level of risk while at the same time aiming for higher returns. This will be achieved by cutting down on the level of risk through diversification of portfolio. The individual investments in a diversified portfolio are only a fraction of such a portfolio.
Risk vs. Return Trade...