Risk refers to the possibility of something bad happening or the degree of uncertainty and/or potential financial loss inherent in an investment decision. It involves uncertainty about the effects or implications of an activity with respect to something that humans value, such as health, financial stability, or the environment. Risk can be categorized into different types, including investment risk, market risk, inflation risk, business risk, liquidity risk, and more. Every saving and investment product has different risks and returns, and investors seek higher returns to compensate themselves for taking such risks.

In general, risk can be reduced using diversification and hedging strategies. It is also possible and prudent to manage investing risks by understanding the basics of risk and how it is measured. Learning the risks that can apply to different scenarios and some of the ways to manage them holistically will help all types of investors and business managers to avoid unnecessary and costly losses.

The word "risk" has two distinct meanings: it can mean both the possibility of danger and simultaneously its potential consequences. Risk is not a synonym of danger, as risk is the combination of danger with a factor of uncertainty. The concepts of danger and exposure are both inherent in risk, and this double meaning has influenced the construction of contemporary approaches to preventing and managing risk.