Risk return ratio

Risk and return are two sides of the same coin when it comes to investing. When you invest money, you are taking on some amount of risk – you may make a profit, or you may lose money. The risk-return ratio is a way of measuring the risk of an investment compared to the potential return you could receive from it. Basically, it's about balancing the amount of risk you're willing to take for the amount of return you could potentially receive in the future. For example, if an investment has a high risk-return ratio, it means that it may have a high return, but there's also a much higher chance of losing money.