Definition for : Risk

Risk is the uncertainty over Future asset Values and Future Returns. Risk is always present in any Investment project. All risks Lead to fluctuations in the Value of a Financial security. In a Market economy, the risk is measured by the Volatility of the price and/or Rate of return of a Security. The degree of risk depends on the Investment timeframe and tends to diminish over the long-term.

(See Chapter 18 Risk and return of the Vernimmen)

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