Definition of "Risk"

A measure of the price volatility of an investment. There are different types of risk, including credit risk, interest rate risk, inflation risk and currency risk.

In Property and Casualty Insurance, risk refers to a peril (e.g., fire, wind storm or auto collision). People view investment risk in many ways which can involve a number of different factors. Good financial planning involves both understanding different types of risk and taking steps to reduce the effects of these risks.