Risk and return go hand in hand. Understanding this relationship is critical to making well-reasoned financial decisions, whether you are making personal investment decisions or working for a business where you’re responsible for investing excess cash. This journal assignment allows you to explore the risk-return relationship in the context of investing in stocks in both of these roles.
Prompt
Write a journal discussing risk and return as it relates to investing in stocks.
Specifically, you must address the following rubric criteria:
Investment Risk: Explain key risks associated with investing in stocks.
Investment Return: Discuss events that can cause the price of a stock to increase or decrease.
Risk-Return Relationship: Explain the relationship between risk and return and how this relationship impacts stock investment decisions, using examples to support your claims.
Reflection: Describe whether you make stock-investment decisions in your personal life and how you do or would make those decisions.
Consider the following in your response: Would your decision-making process change if you needed to make stock-investment decisions for a business? Why or why not?
Guidelines for Submission
Your submission must be a 4- to 5-paragraph Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.
Module Six Journal Rubric
Criteria
Proficient (100%)
Needs Improvement (70%)
Not Complete (0%)
Value
Investment Risk
Explains key risks associated with investing in stocks
Shows progress toward proficiency, but with errors or omissions; areas for improvement may include explaining in more detail the key risks associated with investing in stocks
Does not attempt criterion
21
Investment Return
Discusses events that can cause the price of a stock to increase or decrease
Shows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail the events that can cause the price of a stock to increase or decrease
Does not attempt criterion
21
Risk-Return Relationship
Explains the relationship between risk and return and how this relationship impacts stock investment decisions, using examples to support claims
Shows progress toward proficiency, but with errors or omissions; areas for improvement may include explaining in more detail the relationship between risk and return and how this relationship impacts stock investment decisions or using better examples to support claims
Does not attempt criterion
22
Reflection
