Steemit Crypto Academy Season 2 Week 2 Homework Post for @fendit

Introduction;

Before I write on risk aversion, I would like to say something on risk.

There's risk in almost everything we do as people be it buying cryptocurrencies, starting a new business or even getting married.

Risk can be defined as exposure to danger of various forms like fraud or lots of monies due to price volatility.

Risk aversion.

---

source

---

Risk aversion can be defined as a person's tolerance to uncertainty or the preference of an individual to venture into an opportunity that guarantees more certainty.

There are 3 main risk aversions with their various advantages.

These include; conservative tolerance to risk, moderate tolerance to risk and aggressive or high tolerance to risk.

Which is your risk aversion, which of these products do you find most appealing and why?

As stated above, conservative, moderate and aggressive tolerance to risk are the 3 main risk aversions.

Conservative tolerance to risk is tolerance where investors are willing to tolerate very low volatility feeling very confident going into a business venture.

Moderate tolerance to risk is tolerance where investors accept higher risk than conservative risk tolerators.

Aggressive or high risk tolerance is tolerance where investors accept the highest risk.

I am someone who goes into a business knowing fully well what my profit is. I am not one to take too much risk although I know the higher my risk the higher my profit. With this regard, I am a conservative tolerance to risk kind of investor.

Of all the risk aversions, I find the aggressive risk tolerance the most appealing although I am a conservative tolerance to risk investor. This is due to the fact that when you risk more, you make more profit.

To be a high risk tolerance investor, you need to have a lot of courage and patience as in the case of owning a crytocurrency like bitcoin. Your bitcoin can sharply shoot up or fall drastically.

I will personally not invest a lot into a high risk venture but admire high risk investors a lot. I do not have the tolerance and bravery to wait for my investment to yield a lot of profit in like 2 or 3 to 4 years. I'm the type that wants to know what I'm getting into and how much I will earn from it🤭.

When I do find the courage and money I do not urgently need, I think I would venture into high risk tolerance investments.

There are good products on platforms like binance that suit all types of risks aversions. They include fixed savings, flexible savings, launch pools and high risk products like deFi staking.

Fixed savings.

Fixed savings otherwise known as locked savings is the type of savings where an investor has his investment locked up for a particular period of time. These funds can't be touched unless the period is over earning the investor a lot of profit. The higher the investment time frame, the higher the profit. This kind of saving favours the moderate tolerance to risk investor.

Flexible savings.

Flexible savings is the type of savings where an investor has the flexibility or right to remove his investment anytime he wants to. This is common with conservative tolerance to risk investors. While the investment is locked up, it accumulates interests till one decides to take it out or withdraw.

High risk products.

High risk products are types of investments that merit a lot of rewards because of the high risks involved as compared to fixed and flexible savings.

There are high loses in this kind of investments.

This involves investments into extreme high volatile ventures like crytocurrencies.

These investments are rewarded highly due to the rise and fall in prices of the assets they invest in.

Examples of high risk products are; dual investments and deFi staking.

Launch pools and or launchpads (as it is written on the binance app)

Launch pools in binance give investors a way to get rewards by staking. An investor gets a place in line by staking an asset which can be retrieved at anytime. The asset is staked on an ongoing project or a project yet to commence. Assets are not locked up. Rewards are given in the order of"first come first serve" when farming period is over.

Next, I would be giving more highlight on flexible savings as it is my preferred amongst the products.

I find the flexible savings the most appealing although I also like a high risk venture. But like I explained, I don't have the courage to venture into a high risk business yet.

Flexible savings in binance involve staking assets into the binance platform over a period to accumulate profit and can be withdrawn at anytime. Flexible savings do not keep assets locked in and as such one could even use important money to stake. This is because you will get your money when you need it.

Since I have low tolerance to risk, I like this because I can retrieve my assets with added profits when I feel like.

How to start flexible savings on binanace;

I am a new user and just got started on binance. As a result, I do not have assets for now but I do hope to trade very soon.

To start a flexible savings,

a. Login to your binance account from the app.

b. Use binanace professional to access all features.

This is done by enabling the pointed button.

c. Find and click on savings.

d. Select flexible and choose the currency you want to invest in. I choose bitcoin.

e. Click on subscribe to choose a plan.

f. Enter the amount you want to invest, and agree to terms and conditions.

Since I do not have any bitcoins, it is indicated

g. Confirm purchase

Conclusion.

I would like to say a big thank you to prof @fendit for this informative lecture. This certainly helps and has encourage me to invest and allow my coins work for me.