Investors with a ______ risk tolerance may have a an intermediate time horizon and are usually looking for a mix of safety and growth in their investment portfolio.
When investors decide which kind of investment they feel more confortable with, they must find a balance between the amount of risk they are willing to assume and the potential earnings they are able to gain at that level of risk.
HIgher risk involves higher earnings, on the contrary, lower risks involved lower rates of return on capital.
The period of time one person is willing to invest is directly related to its willingness to take risks: the longer the period, the greater the risk (because once you make a long time investment many events may affect the development of your new business in the hole period, affecting your future earnings: long run events are more uncertain that short run events, hence the risk associated is greater).
Then an intermediate time horizon investment is an intermediate between a short run horizon investment (conservative risk tolerance, for example buying bond from US Treasury) and a long run horizon (aggressive risk tolerance , for example, purchasing of a company).
An intermediate time horizon then is a mixture between safety (lower risk than a long run investment) and growth (higher expected earnings than a short time investment) inthe investment portfolio.
