Risk and return is the trade-off at the centre of finance: higher expected returns require accepting more uncertainty. An investment that promises a high return with no risk is usually mispriced or fraudulent.
风险与收益是金融的核心权衡：想要更高的预期回报，就必须接受更大的不确定性。一项承诺高回报却毫无风险的投资，通常要么定价错了，要么是骗局。
Only undiversifiable risk earns a premium. Losing money because one company fails can be spread across a portfolio, so the market does not pay you for it. Losing money because the whole market falls cannot be diversified away, so it does. This is why the equity risk premium exists, and why leverage does not raise expected returns — it just scales both the gain and the loss.
只有无法分散的风险才配得到溢价。因为一家公司倒闭而亏钱，可以通过组合分散掉，市场不会为此付你钱；因为整个市场下跌而亏钱，分散不掉，所以市场会付。
这就是股权风险溢价存在的原因，也是杠杆不提高预期收益的原因——它只是把赚和亏同时放大。
Higher risk means higher return
Higher expected return. The realised result can be a loss.
Volatility is the only risk
Credit, liquidity and concentration risk are often worse.
Leverage raises returns
It raises the spread, not the expected return per unit of risk.
· risk-adjusted return
· the equity risk premium
· risk appetite
· a favourable risk-reward
· downside risk
risk-adjusted return 风险调整后回报；the equity risk premium 股权风险溢价；risk appetite 风险偏好；a favourable risk-reward 有利的风险回报比；downside risk 下行风险。
· risk vs uncertainty
· volatility vs permanent loss
risk 是可量化的概率，uncertainty 是连概率都不知道；volatility 是波动，permanent loss 是永久损失。
Investors demanded a higher risk premium, pushing the yield to X%.
定价句：投资者要求更高的风险溢价，把收益率推到 X%——demanded 说明这是投资者要的补偿。