Theme 5 Lesson 21:
There Is No Free Lunch in Investing

Risk is inherent in all investments. Some risks are ones investors cannot control. Other risks can be managed. The key is to develop a risk-reward ratio with which you are comfortable. The greater the risk, the higher the potential reward. Given that relationship, there is no free lunch in investing. Investors who choose low risk may earn meager returns. Investors who seek higher returns through high-risk investments may suffer big losses. In this lesson, the students learn about five types of risk, and they compare the risks and rewards associated with several frequently-used investment vehicles. The lesson provides an overview of the modern investment world.

Visuals & Activities


  • Deposit
  • Financial Risk
  • Fraud
  • Fraud Risk
  • Inflation
  • Inflation Risk
  • Liquidity
  • Liquidity Risk
  • Market
  • Money
  • Nominal Rate of Return
  • Rate of Return
  • Real Estate
  • Return
  • Risk
  • Saving
  • Stock
  • Stock Mutual Fund

Standards in Economics and Personal Finance

View the standards that correlate to this lesson:

Related Lessons


Have you used this lesson? Please submit a review.