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Invest Risk Reward

In: Business and Management

Submitted By termpaperdw
Words 458
Pages 2
Stewardship over the resources, and provisions granted by God involves more than merely cautiously watching over finances or attending to thrifty spending decisions. Through scripture it is clear that God intends that man would invest that which is provided to him. The teachings of Jesus impart the Divine will that His people invest and bear the risk of loss. It is also evident that Scripture established a pattern of risk and reward.

The gospel of Matthew verses 14-30 records the Biblical principles of investing. Known as the Parable of the Talents, this portion of scripture tells the story of three individuals endued with five, two, and, one talent respectively. Those that received five and two talents invested the talents and reaped rewards from their endeavors. The master in the parable commends those who ventured out in business and took risks. Likewise, the one talent servant who was afraid and hid the talent is characterized as slothful and chastised harshly by the Master. It is evident from this parable that the Master seeks gains on His investment. At a minimum it is expected that resources would gain a rate of interest consistent with low-risk investment. The master reproves the one-talent servant for not at least gaining nominal interest returns on the resources entrusted to him. The parable reveals the Master’s pleasure in those who would venture and risk for the prospect of returns.

Scripture also points to a basic principle of investing in regard to the level of risk and the rate of return. Investing involves risk. In order to reap the gains associated with investment growth, financiers must be willing to bear substantial risks. Penman (2011) explains the relationship between risk and return noting the ever-present tension between payoffs and there risk. While expectations of high payoffs add to value, increased risk reduces what investors are

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