Interactive Glossary

BROWSE:

Risk:

The quantifiable probability distribution associated with a set of possible outcomes. For example, an investor is more likely to take on additional risk if he can expect some corresponding increase in return on his investment. He is less likely to do so if higher losses or lower returns are expected. International perceptions regarding political stability, trends in the exchange rate, and concerns over changes in environmental regulations affect investor attitudes toward making such commitments; investor attitudes, in turn, affect the cost of capital (reflected in required interest rates on bonds and expected returns on equity investments) for those investments.

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