Risk in ﬁnance means that an asset

Question

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Risk in finance refers to the uncertainty associated with future payments from an asset. This uncertainty may lead to variability in returns, which is why investors demand higher returns for taking on risky investments. Assets that do not pay dividends or capital gains may not necessarily be considered risky, but rather just unprofitable. A present value that is negative would indicate that an asset is worth less than nothing, which is not a common occurrence.

Risk in ﬁNance Means That an Asset