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Risky Behavior

Risky Behavior

Eddie and Miyagi went to lunch at a diner downtown. While they ate, Miyagi continued the lesson.

"There are lots of ways you can measure risk. The big measuring stick is risk premium. How much extra will you get in your portfolio for taking risk? The base case is the U.S. T-bills, and still nobody think the U.S. can default."

Eddie perked up. "We could go bankrupt as a country. Default?"

"Look, you can diversify your portfolio and reduce risk. But the basic idea is, your return must be better...

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