FIN 320 Week 1 DQ 2 - Week 1 DQ 2 What is the relationship...

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Week 1 DQ 2 What is the relationship between risk and return in an organization? Provide examples. How does your organization diversify and mitigate business risk? How do ethical issues influence financial decisions? What effect could this have on financial presentation? The more risk you take, the higher return you expect. Return is the benefit of investing into assets and risk is the cost of that investment. If I were to spend $1000 to invest in a stock that would be my risk. If I made $1000 more from that investment that would be my return, in this case I doubled my investment. I am not working right now so I don't have an organization to talk about. Companies have to consider ethical issues when they are making financial decisions. They have to consider things like whether or not an investment is too risky to take just to maximize profits and/or shareholder wealth. If an investment is too risky they should perhaps consider something a little less risky, but with close to the same profit potential. I would think that taking a little less risk would be better for a company's financial presentation because they wouldn't be spending as much money to make about the same amount. Response 2 The relationship between risk and return is the higher the risk, the higher the return and the lower the risk, the lower the return. As the book reads, the greater the financial leverage, the greater the risk and return. It is important to understand the risk-return

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