Which statement best describes the concept of risk? A) Under a situation of risk, future outcomes can be expected to have only one value. B) Under risk situations there can only be one possible outcome, but with array of potential returns. C) Under uncertain situations, future outcomes can be expected to have only one value. D) Risk describes a situation where there is not just one possible outcome, but an

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Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.