What Is Your Definition Of Risk
Risks are of different types and originate from different situations.
What is your definition of risk. In simple terms risk is the possibility of something bad happening. Risk involves the chance an investment s actual return will differ from the expected return. Business risk is any exposure a company or organization has to factor s that may lower its profits or cause it to go bankrupt. The engineering definition of risk is defined as the product of the 4 holton glyn a.
It may also apply to situations with property or equipment loss or harmful effects on the environment. 5 probability of an event occurring that is viewed as undesirable and an assessment of the expected harm from the event occurring. We have liquidity risk sovereign risk insurance risk business risk default risk etc. Defining risk financial analysts journal 60 6 19 25.
The international standard definition of. Risk includes the possibility of losing some or all of the original investment. It is for this reason that dmaic methodology in six sigma has risk assessment as an inbuilt step. The risk of developing cancer from smoking cigarettes could be expressed as.
Risk implies future uncertainty about deviation from expected earnings or expected outcome. Risk measures the uncertainty that an investor is willing to take to realize a gain from an investment. Risks can be mitigated and even prevented. The formal definition of a risk is an event or occurrence that may negatively impact the project.
Definition types and examples. The sources of business risk are varied but can range from changes. Risk is the chance or probability that a person will be harmed or experience an adverse health effect if exposed to a hazard. However this requires a good amount of understanding of the risks and advance planning.
Risk involves uncertainty about the effects implications of an activity with respect to something that humans value such as health well being wealth property or the environment often focusing on negative undesirable consequences. While the term risk has been used in a variety of contexts to mean different things it generally is defined as the possibility an outcome will not.