Everyone is probably aware of the overall concept of risk and return. We are well aware of the "painful" side of risks present in our investments or 401k plans. However, we want to broaden our awareness that "risk" is not necessarily a bad word. In other words, we want to take a look at the risk balance.

For your initial post discuss the concept of "no risk, no return" and its corollary "high risk, high return". How does risk appetite relate to these concepts?

In your subsequent post(s) discuss "risk-adjusted return" and how this concept differs from the traditional view of risk and return. What are some general ways that companies can manage their risk?

Respond to Erin Dudley's response:

The concept of "no risk, no return" and "high risk, high return" are examples of the risk-return tradeoff investment principle that indicates that the higher the risk, the higher the potential reward. The opposite meaning no risk implies no reward. Investors should consider many factors including overall risk and potential to replace lost funds before making an investment. The risk appetite is the amount and type of risk that an investor is prepared to pursue, retain, or take. There will be investors that are risk averse and play it safe in their investments. Another option is to be accepting of risk, but in a minimal ranges.Risk Appetite denotes the amount, rate, or percentage of risk an individual or an organization requires to bear to move ahead with its plans or objectives.