To invest is to allocate money in the expectation of some benefit in the future.
In finance, the benefit from an investment is called a return. The return may consist of a gain (or loss) realised from the sale of property or an investment, unrealised capital appreciation (or depreciation), or investment income such as dividends, interest, rental income etc., or a combination of capital gain and income. The return may also include currency gains or losses due to changes in the foreign currency exchange rates.
Investors generally expect higher returns from riskier their investments. When a low risk investment is made, the return is also generally low. Similarly, high risk comes with high returns.
- Jul 16, 2021