Definition Of Risk In Business Terms
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Definition of risk in business terms. Risk involves the chance an investment s actual return will differ from the expected return. Business risks are broadly categorized as pure risks which are negative events over which the organization has no control and speculative risks which are potential effects of actions taken and. In other words risk is the probability that an investment will not perform as expected and the investor will lose the money invested in the project. Risk includes the possibility of losing some or all of the original investment.
A probability or threat of damage injury liability loss or any other negative occurrence that is caused by external or internal vulnerabilities and that may be avoided through preemptive action. Different versions of. Risk is a term in accounting and finance used to describe the uncertainty that a future event with a favorable outcome will occur. In the long term risks can threaten an organization s sustainability.
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