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Home > QFINANCE Dictionary > Definition of risk

Definition of

risk

  • 1.

    possibility of suffering harm or loss the possibility of suffering damage or loss in the face of uncertainty about the outcome of actions, future events, or circumstances. Organizations are exposed to various types of risk, including damage to property, injury to personnel, financial loss, and legal liability. These may affect profitability, hinder the achievement of objectives, or lead to business interruption or failure. Risk may be deemed high or low, depending on the probability of an adverse outcome. Risks that can be quantified on the basis of past experience are insurable and those that cannot be calculated are uninsurable.

  • 2.

    potential for negative outcome a condition in which there exists a quantifiable dispersion in the possible outcomes from any activity

risk - Related Articles

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    Currency risk refers to the possibility that movements in foreign exchange rates could affect the value of a business operation or an investment. Whenever an investment or agreement is made based on one currency, movements of that currency against other currencies can have a significant impact on the value or performance for investors or partners using other base currencies

  • Risk Management: Beyond Compliance

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    Over the past decade the line between risk management and compliance has been blurred to the point where, in many organizations, it is impossible to determine if they are not one and the same. In part, this confusion between the two functions was initiated and then exacerbated by the passage
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  • Measuring Country Risk

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    Two key questions must be addressed when investing in emerging markets in Asia, Latin America, and Eastern Europe. The first relates to whether we should impose an additional risk premium when valuing equities in these markets. As we will see, the answer will depend upon whether we view markets
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  • Minimizing Credit Risk

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    Financial corporations and investors face several types of risk. One major risk is credit risk. Despite the fact that market participants typically refer to “credit risk” as if it is one-dimensional, there are actually three forms of this risk: credit default risk, credit spread risk, and downgrade
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Definitions of ’risk’ and meaning of ’risk’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’risk’ and other financial terms with our online QFINANCE Financial Dictionary.

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