risk

risk definition - business

risk

The uncertainty of an outcome. When applied to investments, risk is the uncertainty of the return that will be earned. For example, a company incurs a risk when entering a new market because of the uncertainty as to how their product will be received by consumers. Risk for businesses results from a variety of factors that range from not being able to accurately forecast interest rates to unexpected inflation (or deflation). See also business risk, event risk, financial risk, foreign exchange risk, interest rate risk, liquidity risk, purchasing power risk.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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