what is difference between risks return and risk profile.

1.	what is difference between risks return and risk profile.
Answer» Risk and Return: In investing, risk and return are highly correlated. Increased potential returns on investment usually go hand-in-hand with increased risk. Different types of risks include project-specific risk, industry-specific risk, competitive risk, international risk, and market risk. Return refers to either gains and losses made from trading a security. Risk Profile: If there is one thing that the equity market is associated with, it is ‘risk’. Per a strictly financial definition, risk refers to volatility in the market. However, several investors associate the term along the lines of losing out on their money or suffering fluctuations for which they were not prepared. Since risk has such a hefty bearing on investment decisions of individuals, it is important to have an understanding of the risk profile to manage risks effectively.

Answer»

Risk and Return:

In investing, risk and return are highly correlated. Increased potential returns on investment usually go hand-in-hand with increased risk. Different types of risks include project-specific risk, industry-specific risk, competitive risk, international risk, and market risk. Return refers to either gains and losses made from trading a security.

Risk Profile:

If there is one thing that the equity market is associated with, it is ‘risk’. Per a strictly financial definition, risk refers to volatility in the market. However, several investors associate the term along the lines of losing out on their money or suffering fluctuations for which they were not prepared.

Since risk has such a hefty bearing on investment decisions of individuals, it is important to have an understanding of the risk profile to manage risks effectively.

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