BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Risk is the possibility that an investment will lose money.
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Risk is the possibility that an investment will earn a negative return.
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Risk is the possibility that an investment’s actual return will be less than its expected return.
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Risk is the uncertainty regarding the gain or loss from an investment.
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Detailed explanation-1: -Financial risk refers to the likelihood of losing money on a business or investment decision. Risks associated with finances can result in capital losses for individuals and businesses.
Detailed explanation-2: -Inflationary risk refers to the risk that inflation will undermine the performance of an investment, the value of an asset, or the purchasing power of a stream of income.
Detailed explanation-3: -A risk may be taken or not, while uncertainty is a circumstance that must be faced by business owners and people in the financial world. Taking a risk may result in either a gain or a loss because the probable outcomes are known, while uncertainty comes with unknown probabilities.
Detailed explanation-4: -Risk is defined in financial terms as the chance that an outcome or investment’s actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment.