Why Do Investors Try To Achieve Higher Returns For Some Investments? Stocks have historically delivered higher returns than bonds because there is a greater risk that, if the company fails, all of the stockholders’ investment will be lost. However, a stock’s price will also rise in spite of this risk when the company performs well,
Why The Higher The Risk The Higher The Return? The higher the risk, the higher the return. . … If the risk of doing business is high, the corresponding return must be also high. This is the general principle. If an investment is very risky, the return from that investment must also be high enough
How Do You Explain Sharpe Ratio? The Sharpe Ratio is a financial metric often used by investors when assessing the performance of investment management products and professionals. It consists of taking the excess return of the portfolio, relative to the risk-free rate, and dividing it by the standard deviation of the portfolio’s excess returns. What
What Are Examples Of Long Term Investments? Stocks. … Interest-Paying Bonds. … Zero-Coupon Bonds. … Mutual Funds. … Exchange-Traded Funds. … Alternative Investments. … Retirement Accounts. What are the four types of long-term investment? Stocks. Investopedia defines stock as “…a share in the ownership of a company. … Bonds. Buying bonds essentially means you’re lending