Reading: Risk and Reward

Risk and Reward Context

$1,000 investment (risk)

FDIC Insured Savings Account  - Reward: 1% annual interest (Yield $1,010)         Risk: 0% 

Lend Cash to Reputable Company – Reward: 6% annual interest (Yield $1,060)
(Buy their Corporate Bonds)          Risk: Low Risk Firm

Doctor – stable income – Reward: 8% annual interest (Yield $1,080)
$200k/yr salary           Risk: Loses employment can not pay

Invest in Stock Market – Reward: 10% annual return ($1,100)        Risk: Volatility

Brother in Law money making scheme – Reward: 50% ownership stake in business     Risk: Lose everything, ruin relationships, family happiness

Graphing Risk and Reward