The Big Short — Risk vs Reward

In this scene from The Big Short, the traders illustrate the concept of risk/reward payoffs using Jenga blocks. When trying to determine which investments to approach, the safest returns (the blocks at the top) are the easiest to invest in, but they don’t offer much of a return because they are so safe. The investments that are a bit risker (the blocks at the bottom) are compensated with higher returns to compensate investors who take the risk.

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