{"id":298,"date":"2015-04-21T18:25:18","date_gmt":"2015-04-21T18:25:18","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterybusiness1xngcxmaster\/?post_type=chapter&p=298"},"modified":"2015-07-11T23:06:06","modified_gmt":"2015-07-11T23:06:06","slug":"risks-and-rewards","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/chapter\/risks-and-rewards\/","title":{"raw":"Outcome: Risks and Rewards","rendered":"Outcome: Risks and Rewards"},"content":{"raw":"

What you\u2019ll learn to do:\u00a0identify the potential risks and rewards to businesses and individuals associated with the issuance, purchase, and sale of securities<\/h2>\r\nThe trading of securities is a primary source of wealth creation for both businesses and individuals. However, with the opportunity for financial gain also comes the peril of loss\u2014risk versus reward. \u00a0On May 18, 2012, Facebook made its IPO (initial public offering) of stock in the social media giant. When the markets opened that morning and individuals were able to \"own\" a piece of Facebook, a single share sold for an average of $42 per share. Sounds like a great deal to be one of the first to have a financial stake in the premier provider of social media\u2014less than $50! By September, 2012, that same share of Facebook was selling for approximately $21\u2014a loss of 50 percent of the initial investment. It took more than a year for the share price to rise back to the IPO price of $42. How can such a \"sure thing\" go so badly? There was\u00a0a series of unfortunate and unseen events that led to this disastrous IPO, but those events only serve to underscore that, even with the \"sure thing,\" where there is reward there is also risk.\u00a0\u00a0In this section we will explore some of the potential risks and rewards to businesses and individuals with the issuance, purchase, and sale of securities.\r\n

Learning Activities<\/h3>\r\nThe learning activities for this section include:\r\n