Risk and return Essay Example | Topics and Well Written Essays - 1000 words

Risk and return - Essay Example Risk and return are two inversely correlated concepts. A person or a corporation that is risk adverse will not take chances. Lower risk lead to lower returns and higher risk leads to higher returns. The general rule of higher risk leading to higher returns is not set in stone. One of the problems with higher risk is that it can lead to financial catastrophes. For example imagine a person that invests in a penny stock. Penny stocks are considered the most risky of all types of investments. The person decided to invest in penny stock X because he wanted the possibility of earning a higher return. Due to the risk associated with penny stocks the stock ended up defaulting due to the fact that the company went out of business. In this particular case instead of obtaining a higher return the investor ended up losing all his money. 2. Return on investment can be defined as a performance measure used to evaluate the efficiency or to compare the efficiency of a number of different investments (Investopedia, 2011). The formula to calculate return on investment is (Gain from investment –cost of investment) / cost of investment. Companies are always looking to maximize their return on investment. Corporations able to obtain above normal returns on investment are more profitable than the competition. Return on investment can be manipulated when determining projects by changing the expected return of the company. For example a company may establish new financial policy of only accepting projects that achieve a return on investment of 10%. ... The firm lost approximately $15,000 from this project. To me this experienced proved that higher risk can lead to operating losses. 4. The concept of higher risk leading to higher profits is real and in my personal experience it has paid off dividend. When I took my first finance course the professor gave the class a stock market simulation project. I like the project so much that I decided to turn the project into a reality. I opened up an investment account with Scottrade. I invested $2000 to build up a portfolio of stocks. The portfolio was composed of about six stocks including several blue chip stocks and a penny stock. The penny stock was VTSS. I invested about $350 in the VTSS penny stock. After two months the penny stock when up from $0.35 to over $1.50 cents. I made over $1000 dollars from the purchase of the stock. When the class ended I decided to cash out my portfolio. I utilized the earnings from my portfolio to purchase a 1994 Eclipse automobile for my sister. 5. In the corporate world companies have to take risk in order to obtain a return. A risk that a lot of multinational companies are faced with is the decision to penetrate new marketplaces. There are regions in the world that are susceptible to huge risk such as the Middle East. In the Middle East the risks associated with terrorism are very high especially for American companies. Taking chances is a part of the business process. Even when a company has a successful product line the constant changes in the marketplace forces companies to take risk such as introducing new products into the marketplace 6. People take risk in their regular everyday life without even realizing they are doing it. For example a person

Diagnostic Writing Essay Example | Topics and Well Written Essays - 750 words

Diagnostic Writing - Essay Example The patriarchal society was created by men to maintain a dominant position in the society that restricts the role of women in any decision making and promotes a set of rules for their conduct and actions, both within the family and outside the family environment. The women are denied the basic right for self expression and empowerment of women has increasingly become a major issue for the societies at large. Later, when the women, especially those coming from lower strata of society and from black community, started sharing work with their counterparts, they were denied their rightful wages and status. Truth’s speech in 1851 at Ohio’s Women’s Rights Convention, is a persuasive text that question’s the society’s moral right to deny the women equal rights when they have shown that they are capable of working alongside men, in every field. In her speech, Truth has pointed out that though women, in general, have been denied equal rights and decision powers but the ‘black’ women have even been stripped of their gender identity and denied the basic minimum respect that ‘white’ women command! She has been highly critical of system that lets the ‘black’ woman do the work of men but when it comes to recognizing them at par with the men, there is no hesitation in highlighting the gender discrimination. It is but for a woman, Mary, that ‘Jesus our God’ was born so how can a society morally deny the women any rights? She says that she has worked like a man, borne lashes and at times, even done better than them. At the same, she has borne and reared children who were sold into slavery in front them and still she has not been accorded the status of either a woman or equal partner! She has exhorted the women to fight collectively for their rights because ‘if the first woman God ever made was strong enough to turn the world upside down all alone, these women together ought to