Final answer:
A company managing recent economic risks must balance safe investments with potential high returns, acknowledging influence from personal preferences and the importance of examining risk and return within various time frames. An informed investor on E-Trade who researches and monitors investments is likely to fare better than one who invests randomly and disregards financial news.
Step-by-step explanation:
Evaluating a company's recent actions in managing economic risks and uncertainty involves considering natural disasters, wars, or massive unemployment, which are significant factors over which businesses have little control. To ensure they meet their needs and protect stakeholders, companies often have to decide between safe investments and high-return, high-risk opportunities. These decisions are influenced by personal preferences and are particularly relevant within specific time frames.
If we consider two investors on the E-Trade platform, one who actively monitors their investments, tracking prices, and company actions, versus another who randomly selects companies and ignores financial news, we can anticipate divergent portfolio performances. The diligent investor is likely to manage risks more effectively and potentially achieve better returns, whereas the random, uninformed approach of the other might result in a portfolio subject to significant uncertainty and potential losses.