Thursday, January 28, 2010

Risk and Reward

When an investment is risky investors seek a greater level of return in compensation.

When a borrower is more likely to default the rate of a loan goes up to compensate for the additional risk.

Does anyone not see the correlation for bonuses at companies that have been bailed out?

Would you quit your guaranteed job and go work for a company that might go under in 12 months?

Possibly if the incentive was good enough....right...?

Get it?

3 comments:

Rocketstar said...

But were they really in danger of going out of business when the gov. kept on saying they are 'too big to let fail'?

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