This is a great post by Seth Godin. We are taught at an early age of the risk/reward equation. Some people have no concept of the risk and fly by the seat of their pants in everything they do daring fate to punish them. Others are so risk adverse they aren't willing to push the limit on anything. I think finding a healthy middle ground like everything in life is important. Yes, the greater the risk the greater the reward.
In Jr. High if you ask the most popular girl out you run the risk of getting rejected and being laughed at or you could end up being the coolest kid in school because you had the guts to do what no other guy would do. On Wall Street the biggest risk investments are the ones that if they go right have the biggest rewards. There isn't a big risk in T-Bills (back in the day) and therefore the gains were next to nothing. It was the safe bet with little risk and little reward. Everything in life in some way has a risk/reward equation. The key is to make sure you have some good advisors to help you weigh the cost, understand the risk, and even coach you through.
For example, there is high risk if I try to climb Mt. Rainier by myself but if I hire the best guide service in the world (IMG) run by the best climbers in the world then the risk is greatly reduced. The reward is the same but by being smart and surronding myself with the right people I can manage and reduce the risk. Nothing in life worth doing is without risks. The challenge is to fully understand the risk, manage the risk, and don't blindly walk of the edge becuase you didn't have all the right information.