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QWhat is the term for a measure of the potential loss or gain from an investment, taking into account both the probability of occurrence and the magnitude of the outcome?

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  • A Risk tolerance ✔ ✖
  • B Risk management ✔ ✖
  • C Expected return ✔ ✖
  • D Risk-reward ratio ✔ ✖
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Explanation

The risk-reward ratio is a measure of the potential loss or gain from an investment, taking into account both the probability of occurrence and the magnitude of the outcome. It helps investors assess the balance between the potential return and the level of risk associated with an investment opportunity.

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