Risk

Risk is any chance that some event will occur. Commonly, risk is associated with unfavorable events, or threats. Favorable risks are called opportunities.

Definitions

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Risk. The chance that some unfavorable event will occur. In a financial market context, the chance that an investment will provide a low or negative return.

According to Management by Robbins and Coulter (14th edition),

Risk. A situation in which a decision maker is able to estimate the likelihood of certain outcomes.

Related concepts

• Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.

Related lectures

• Introduction to Financial Management.