Understand the idea
Looking only at a successful outcome hides the amount exposed to loss. A complete example includes what happens when no return is received.
Understand a full-loss scenario
Looking only at a successful outcome hides the amount exposed to loss. A complete example includes what happens when no return is received.
Inside this edition
One topic. Three useful perspectives.
3 sections
Context
Put it into practice
Write the initial amount beside both outcomes. If 100 units are committed and nothing is returned, the net result is minus 100 units.
Know the limits
A potential gain does not reduce the amount that can be lost in the unfavorable outcome.
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