The investment objective is a trade-off between the desired return and risk: the higher the desired return, the higher the risk. However, it is not intuitive what this relationship means in practical terms. To set the investment objective, it can be easier to express the relationship as the likelihood of achieving a target return and of falling below a minimum return.

If the portfolio is too low risk, the likelihood of achieving the investment objective can be boosted significantly with little increase in the risk of the return falling below the minimum required return. Conversely, if the portfolio is too high risk, the likelihood of the return falling below the minimum return can be reduced significantly at the expense of only a small reduction in the likelihood of achieving the investment objective.

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