The idea about the risk-return tradeoff is quite interesting. Indeed concern about return does include a consideration of the risk. Most investment decisions are in fact all about comparing risk and return. The difficulty of making investment decision arises due to the uncertainty that goes into the measurement of risk and returns. As important as it is to predict the return, risk measurement is equally important too. Who likes risk? According to an article from Heidi Grant (2013) at the Harvard Business Review, human nature is risk averse or more specifically loss averse. Meaning that people focus more on the negative outcome than on the positive outcome.If you agree with this, how can we determine our risk tolerance? Apparently is not as easy. You may consider yourself conservative investor and follow a well-structured plan before making a decision, however as we can see it’s nearly impossible to forecast the “exact†result of a project. Therefore, if we expect to maximize wealth, we must engage in some kind of risk. The above article states as well that there is a “Hidden Danger of Being Risk Averseâ€(Grant 2013)(*** and that some of the riskier situations had lead to incredibly successful outcomes. (**Grant, H. (2013),“The Hidden Danger of Being Risk-Averseâ€, Harvard Business Review Publishing, Economy, [Online] Available fromhttps://hbr.org/2013/07/hidden-danger-of-being-risk-averse/)Do you agree with this? Have you faced any situation where you had to encounter a higher risk and later turned into a huge success?I need explanation to understand and references for further readingSincerely,