The risk-Return Trade-off ↑ Profitability→↑Risk l Profitability→Risk ex, investing in stocks VS savings accounts + Stocks are more profitable but riskier Savings accounts are less profitable and less riskyor safer) Financial manager must choose appropriate combinationsThe Risk-Return Trade-off  Profitability →  Risk  Profitability →  Risk ex., investing in stocks vs.savings accounts  Stocks are more profitable but riskier  Savings accounts are less profitable and less risky(or safer)  Financial manager must choose appropriate combinations