Upside Risk
Definition
Upside Risk is the potential for an investment`s return to exceed the expected return, offering more potential for profit but also more uncertainty.
Benefits
Upside risk identifies high-return possibilities while recognizing related uncertainties.
Frequently Asked Questions
What is upside risk potential? Upside risk potential is the chance that an investment`s returns will exceed expectations, offering more profit but with more uncertainty.
How does investment risk affect potential returns? Investment risk affects potential returns by introducing uncertainty; higher risk typically offers the chance for higher returns but also greater chances of loss.
Does higher risk mean higher expected return? Yes, higher risk usually means a higher expected return, as investors want more reward for taking on more uncertainty.
Summary
Upside risk identifies chances for high returns while recognizing associated uncertainties.