• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

The level of risk

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › The level of risk

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • October 25, 2015 at 10:02 pm #278923
    Arun
    Member
    • Topics: 16
    • Replies: 26
    • ☆

    Dear Sir,

    I was reading the F9 notes and in the second chapter I came across the following paragraph under the factors which determine interest rates:

    ‘The additional return required before someone would be indifferent between investing in
    an equity share or a deposit account will differ from individual to individual, as we all have a
    different attitude to risk. Therefore the relationship between risk and return is different for
    each individual.’

    I can’t seem to understand what it means. Could you please explain it to me? An example would be helpful as well.

    Thanks,

    Arun.

    October 26, 2015 at 6:44 am #278943
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    An investment in shares is more risky than putting money in the bank and earning interest, because if you invest in shares you are never certain what return you will get – the dividend might end up being very high or it might end up being very low.

    So people only invest in shares if they expect they will get (on average) a higher return than investing in the bank. How must extra they need for the extra risk is different between different people – some people don’t care a lot about the extra risk, but other people might be very scared of the extra risk.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • mrjonbain on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Ken Garrett on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Ken Garrett on The nature and structure of organisations – ACCA Paper BT
  • OmarAlbeity on ACCA BT Chapter 6 – Some legal obligations – Questions
  • Salimbek909 on The nature and structure of organisations – ACCA Paper BT

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in