Your textbook says, "In the world of finance, there is one certainty:you must take more risk to earn a higher return." It then identifies these types of risk: inflation risk, business risk, interest rate risk, and liquidity risk.

Risk is a consideration in many of the decisions we make.

Describe financial risks that are involved when doing one of the following such as purchasing a new home, going back to school to get a degree, or getting a payday loan. What are the downsides to that decision? What are some of the upsides to that decision?

How might your financial goals and personal financial plan impact the amount of risk you are willing to take on with regard to a financial decision?