what is risk in context of financial decision making?

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  • what is risk in context of financial decision making?


Answer #1 | 14/12 2013 05:17
You'll lose money if you make a bad decision.
Answer #2 | 14/12 2013 05:24
the "risk" is a way of describing the likelihood or chance that you will lose your investment in part or in total. High risk investments have a very high chance of losing everything; they have value as investment vehicles because the potential gain is extremely high. If the potential gain is low, and the risk of total loss is high, you would be making a fairly stupid investment, in the opinion of most people. The investor needs to decide how important it is to them to keep their investment, and invest accordingly. Safe (low risk of loss) investments tend to have low yields. Aggressive (high-risk) investments have potential for much higher yields (growth) but tend to carry the risk of great loss as part of the game. There may be fairly large fluctuations in value over time.

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