1. Which one of the following statements best describes risk?
a. The potential of having a financial loss.
b. The potential you will make a bad choice.
c. The losses you have from negative outcomes.
d. The negative results of bad choices.
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Option B) best describes the risk
What is a risk?
Risk is defined as the potential for loss or profit. It can be either from an investment or from some warning to your well-being.
Is it the same for everybody?
No, different people perceive things differently, Such as one thing may be a high risk for someone while someone may be completely okay with it at the same time.
Explanation for correct option
Option B) The potential you will make a bad choice, best describes risk because when somebody takes a risk, its the worst outcome is that he/she made a bad choice and has to face outcomes to it.
Explanation of incorrect options
Rest of the things are just the outcomes of making a bad choice
- a. The potential of having a financial loss which will be a result of a bad choice.
- c. The losses you have from negative outcomes will again be a result of a bad choice.
- d. The negative results of bad choices.
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