One trade-off that I have had between risk and return is with gambling at central city. The higher the potential winnings the higher amount of money you risk to win. This often makes me stay to lower cost games where I have less risks of loosing money however the return is not as good as the higher risk games.
The present value of a dollar is more valuable than its future value can be shown with the example of buying a new car. If you buy a new car the minute you drive it off the dealership lot the price of the car decreases. As well as you put miles on the vehicle and have it for a few years the value will continue to decline as newer and better versions continue to come out that people want more.
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