The risks and returns of securities investment coexist. Returns are the compensation for investors to bear risks, and risks are the price for investors to obtain returns. Their relationship can be expressed as: expected rate of return = risk-free interest rate + risk compensation

1. Securities are a collective name for a variety of economic equity certificates, and also refer to specialized types of products, which are used to certify securities. A legal document that qualifies the holder for a specific interest. Securities mainly include capital securities, currency securities and commodity securities.

Securities in a narrow sense mainly refer to securities products in the securities market, including equity market products such as stocks, debt market products such as bonds, and derivative market products such as stock futures, options, interest rate futures, etc. . In February 2021, the "Supplementary Regulations of the Supreme People's Court and the Supreme People's Procuratorate on the Enforcement of Determined Crimes (VII)" stipulated the crime of fraudulent issuance of securities (the crime of fraudulent issuance of stocks and bonds was cancelled).

3. Investment income refers to the income earned by enterprises or individuals from external investments (the losses incurred are negative), such as dividend income, bond interest income and joint ventures with other units obtained by enterprises from external investments. Profit etc. It is the net income after deducting investment losses from profits, dividends, bond interest and other income obtained from external investment.

Four. Strictly speaking, the so-called investment income refers to the monetary income based on the project. It includes both the project's sales revenue and the value of asset recovery (that is, the fixed assets and working capital recovered at the end of the project's life). Investment can be divided into two categories: industrial investment and financial investment. What people usually call financial investment mainly refers to securities investment.

Fifth, risk is the uncertainty between the purpose of production and the results of labor. It has two meanings: one definition emphasizes that risk manifests itself as uncertainty of returns; while the other definition emphasizes Risk is expressed as cost or uncertainty of price. If risk is expressed as uncertainty of benefit or price, it means that the result of the risk may bring loss, profit, or no loss or profit. It is a broad risk and everyone Activities that exercise ownership rights should be considered management risks, and financial risks fall into this category. Risk represents the uncertainty of loss, which means that risk can only represent loss, and there is no possibility of profit from the risk, so it is a narrow risk.

Sixth, risk and return are directly proportional, so generally aggressive investors prefer high risks in order to obtain higher profits, while prudent investors focus on safety considerations