Podcast
Questions and Answers
Risk is defined in financial terms as the chance that an outcome or investment's actual ______ will differ from an expected outcome or return.
Risk is defined in financial terms as the chance that an outcome or investment's actual ______ will differ from an expected outcome or return.
gains
Risk includes the possibility of losing some or all of an original ______.
Risk includes the possibility of losing some or all of an original ______.
investment
Quantifiably, risk is usually assessed by considering ______ behaviors and outcomes.
Quantifiably, risk is usually assessed by considering ______ behaviors and outcomes.
historical
In finance, ______ deviation is a common metric associated with risk.
In finance, ______ deviation is a common metric associated with risk.
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Standard deviation provides a measure of the ______ of asset prices in comparison to their historical averages in a given time frame.
Standard deviation provides a measure of the ______ of asset prices in comparison to their historical averages in a given time frame.
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What is the primary purpose of considering historical behaviors and outcomes in risk assessment?
What is the primary purpose of considering historical behaviors and outcomes in risk assessment?
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What is the relationship between standard deviation and risk in finance?
What is the relationship between standard deviation and risk in finance?
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How does the concept of risk relate to the possibility of losing some or all of an original investment?
How does the concept of risk relate to the possibility of losing some or all of an original investment?
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What is the purpose of using standard deviation in finance?
What is the purpose of using standard deviation in finance?
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What is the key characteristic of risk in financial terms?
What is the key characteristic of risk in financial terms?
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Study Notes
Risk in Finance
- Risk refers to the possibility that an investment's actual returns will differ from expected returns.
- Risk includes the chance of losing some or all of the original investment.
Assessing Risk
- Historical behaviors and outcomes are considered when quantifying risk.
- Standard deviation is a common metric used to measure risk in finance.
- Standard deviation provides a measure of asset price volatility compared to historical averages in a given time frame.
Risk in Finance
- Risk refers to the possibility that an investment's actual returns will differ from expected returns.
- Risk includes the chance of losing some or all of the original investment.
Assessing Risk
- Historical behaviors and outcomes are considered when quantifying risk.
- Standard deviation is a common metric used to measure risk in finance.
- Standard deviation provides a measure of asset price volatility compared to historical averages in a given time frame.
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Description
Assess the concept of risk in finance, including its definition, measurement, and volatility of asset prices. Learn about standard deviation and its role in evaluating investment risk.
