what is a risk

Risk is the possibility of something bad happening. It involves uncertainty about the effects or implications of an activity with respect to something that humans value, often focusing on negative, undesirable consequences. Risk can refer to the chance of loss or injury, the perils to the subject matter of an insurance contract, or the degree of probability of such loss. In finance, risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision. The understanding of risk, the methods of assessment and management, the descriptions of risk, and even the definitions of risk differ in different practice areas such as business, economics, environment, finance, information technology, health, insurance, safety, and security. The international standard definition of risk for common understanding in different applications is "effect of uncertainty on objectives". The level of risk reflects the likelihood of the unwanted event and the potential consequences if it occurs.