What is risk in finance?

Question

Ashraf E. Mahmoud (PhD) · Answer

Thanks for the invitation;

"Financial Risk" ( as I believe and not "risk in finance" as mentioned in the question), in a very simple words define as "Uncertainty associated with any financial investment", or "the degree of uncertainty of "return on an asset", and same is usually calculated by using the "The standard deviation" of the return on investment "ROI".

osama faitor · Answer

I agree with colleagues Answers

I have nothing more to add

Stefanos Sampatakakis · Answer

Since from a business perspective, the ultimate goal for every company is the increase in its profitability, along with the increase in its shareholders value, we could define risk as a state or occasion that jeopardizes the company's profitability and cash inflow.

Sources of risk vary and have already been stated in previous answers.

I hope I was helpful.

Adil Faisal Abdalla Mohamed · Answer

Financial risk can be briefly defined as the variability of future returns.

Saeed Ur Rehman · Answer

Risk in finance as the name suggests is the risk that involves financial loss to firms. Financial risk is a very broad term but generally it arises due to instability and losses in the financial market caused by movements in stock prices, currencies, interest rates and more. Financial risk is one of the high-priority risk types for every business. Financial risk is caused due to market movements and market movements can include a number of factors.

Financial risk can be classified into various types such as:

Market Risk
Credit Risk
Liquidity Risk
Operational Risk and
Legal Risk.

Ahmed Taha · Answer

Finance is very much linked with the risk specially when it comes to budgeting and investing

Vaiyapuri Gopalakrishnan · Answer

Agree on experts answers, Thanks for your invitation.

D S Vik Pahladi · Answer

Financial risk is the possibility that shareholders will lose money when they invest in a company that has debt, if the company's cash flow proves inadequate to meet its financial obligations. When a company uses debt financing, its creditors are repaid before its shareholders if the company becomes insolvent. Financial risk also refers to the possibility of a corporation or government defaulting on its bonds, which would cause those bondholders to lose money.Financial risk is the general term for many different types of risks related to the finance industry. These include risks involving financial transactions such us company loans, and its exposure to loan default. The term is typically used to reflect an investor's uncertainty of collecting returns and the potential for monetary loss.There are many types of financial risks. The most common ones include credit risk, liquidity risk, asset backed risk, foreign investment risk, equity risk and currency risk.

P A Cariappa Appaiah · Answer

After investing a huge investment, with no proper, " ROI" then naturally risk arises.

Maen Al-Rawabdeh · Answer

Financial risk is an umbrella term for multiple types of risk associated with financing, including financial transactions that include company loans in risk of default. Risk is a term often used to imply downside risk, meaning the uncertainty of a return and the potential for financial loss

Mahmoud Zaher Tarakji · Answer

Lack of infrastructure for the project properly established

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