4.3.6 Precipice bonds – mis-selling or mis-buying?

In an environment of lower investment returns, the high returns offered by precipice bonds were attractive to investors.

Arguably, even the most inexperienced investors should understand that there is a relationship between risk and return. High returns are usually associated with high risks. Investors should have been alive to this very simple fact of investment life when considering whether to invest in precipice bonds. The simple risk–return relationship is not rocket science!