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Explain the relationship between risk and rate of return. How does this relationship connect to diversification?

User Cmxl
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Think of lottery tickets for example. They involve a very high risk of losing your money and the possibility of an extremely high reward, with a giant check with a whole lot of zeroes. Or penny stocks: They were also very risky and yet seemed so full of amazing potential. I hope this help's you. Good luck!!
User Amrit Sharma
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