What is risk-to-reward?
Risk-to-reward compares what a bet can lose against what it can win. Buy a share at 30¢: you risk 30¢ to win 70¢, a bit over 1:2. Useful, and dangerously incomplete alone: a beautiful ratio with poor odds is still a losing bet. It only means something next to probability.
The ratio, and the trap inside it
A 10¢ share offers 1:9, risk a dime, win ninety cents. Irresistible, until you ask how often it wins. If the true odds are 5%, that gorgeous ratio is a slow leak: on average you lose 5¢ per share, forever. Longshot bias, falling in love with the payoff and forgetting the probability, is one of the most reliable ways crowds misprice markets.
The complete question
Ratio and probability together produce expected value, and EV is what actually gets decided on. That same 10¢ share becomes a fine bet the moment your CEO's research supports 15% instead of 10, the edge, not the ratio, is what changed. Payoff shape matters; being right about the odds matters more.
Where the ratio does earn its keep
Risk-to-reward shapes the experience of a strategy: low-price shares lose often and win big; high-price shares win often and lose big when they miss. Neither is better, but one might fit your temperament, and that's a legitimate thing to tell your CEO when you shape the fund's personality.