#RiskRewardRatio

#RiskRewardRatio The risk-reward ratio, also known as a risk-return ratio, is a mathematical calculation investors use to measure the expected gains of a given investment against the risk of loss.

The risk-reward ratio is typically expressed as a figure for the assessed risk separated by a colon from the figure for the prospective reward. Usually, the ratio quantifies the relationship between the potential dollars lost should the investment or action fail versus the dollars realized if all goes as planned -- i.e., reward. For example, a risk-reward ratio of 1:3 would signify that for every $1 risked, there's a $3 potential profit or reward.