Code: 3.3.1 · Adults
Relationship between risk and reward
Descriptors
Knowledge
What you can do at this level
- Kresiliencedaily-lifelarge-majority
Understands the relationship between risk and potential reward which means that if there is a high chance of making money on an investment there is also likely to be a high chance of losing money
- Kdaily-lifelarge-majority
Understands the purpose of investment diversification as a strategy to reduce the risk
Skill
What you can do at this level
- Sresiliencedaily-life
Identifies the potential financial risks and rewards related to a decision that needs to be made
- Sdaily-life
Compares the risk and reward of different financial investments
- Ssustainabledaily-lifelarge-majority
Takes into account the need for asset growth, financial security, and one’s own sustainability preferences when considering investment risk
- Sresiliencedaily-lifelarge-majority
Considers the risk of using credit for discretionary spending
- Learning outcome types
- K — What you need to know: theoretical understanding and factual information.
- S — What you can do: practical and technical abilities.