BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Return Expectation
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Risk
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Probable Return
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Variable Return
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Detailed explanation-1: -This possibility of variation of the actual return from the expected return is termed as risk. Risk is the variability in the expected return from a project. In other words, it is the degree of deviation from expected return.
Detailed explanation-2: -Definition: Risk implies future uncertainty about deviation from expected earnings or expected outcome. Risk measures the uncertainty that an investor is willing to take to realize a gain from an investment. Description: Risks are of different types and originate from different situations.
Detailed explanation-3: -Types of Risks Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.
Detailed explanation-4: -Risk aversion is the tendency to avoid risk. The term risk-averse describes the investor who chooses the preservation of capital over the potential for a higher-than-average return. In investing, risk equals price volatility. A volatile investment can make you rich or devour your savings.