Economics Mutual Funds Questions
The risk-return tradeoff in mutual funds refers to the relationship between the level of risk associated with an investment and the potential return or profit that can be earned. Generally, mutual funds with higher levels of risk have the potential for higher returns, while those with lower levels of risk offer lower potential returns. Investors must carefully consider their risk tolerance and investment goals when choosing mutual funds, as higher returns often come with a higher likelihood of loss or volatility.