why is the risk return ratio important 
the risk return ratio helps investors assess whether a potential investment is worth making a lower ratio means that the potential reward is greater than the potential risk while a high ratio means the opposite by understanding the risk return ratio investors can make more informed decisions about their investments and manage their risk more effectively can the risk return ratio of an investment change over time yes the risk return ratio can change over time as the investment s price moves its potential risk changes for example if a stock s price goes up the potential reward may become less than when it was initially purchased while the potential risk may have also increased it s important to regularly monitor the risk return ratio of your investments and adjust your portfolio accordingly to ensure that your investments align with your goals and risk tolerance 