Topic 4 - Risk Flashcards
1
Q
What is risk in finance?
A
in finance, risk is linked to the uncertainty that the outcome is not known in advance.
Risk is two-sided; even if you are better off, that will be a risk.
Most of the time, a normal distribution will be used to describe the randomness of the future (unknown) events.
2
Q
Standard deviation
A
how far away from the mean you can have observations
