how does the relationship between risk and return drive individuals investment decisions?
If one makes a high risk investment one has more of a chance to lose their money and needs to be rewarded with a better return than one who invested in a low risk investment. The possibility of a higher return for risky investments is needed to attract investors who can afford to take a loss. Age is a factor in selling life insurance policies or investing in a business where the key decision maker is older and whose death would put your investment at risk.
