Modern Economics & Management Forum

This article explores the core relationship and complexity between risk and return in financial investment. By analyzing classical theories, market phenomena, and investor behaviors, it discusses the positive correlation between the two, risk premium, and the influence of risk preference. The study finds that the relationship between risk and return is not a simple linear one, but is influenced by factors such as market volatility, information asymmetry, and sentiment. This article analyzes the risk-return characteristics of stocks, bonds, derivatives, and other assets, emphasizes the importance of risk management in investment portfolios, and proposes suggestions for enhancing risk awareness, optimizing strategies, and strengthening supervision, for reference by investors and regulators.