An act of balancing two desirable qualities or states that are incompatible; sacrificing one to achieve another.
A trade-off occurs when an individual, investor, or entity must make a choice between two or more options that are mutually exclusive. By choosing one option, the benefits of the other(s) are forgone. This concept is fundamental in economics and finance, where resources are typically scarce, necessitating decisions that involve sacrificing one benefit for another.