Question

Name and briefly describe the four categories of risk explained in the article.

Answer 1

Based on the information provided in the article, the four (4) categories of risk explained include the following:

1. Market risk: this is a risk that limits the ability of an investment to increase in value, thereby, leading to loss of money in the long-run.
2. Financial or business risk: it describes the risk that is associated with investing an amount of money in a private business, so as to gain a lot of profit in the long run.
3. Inflation risk: it describes the risk that is associated with a lower rate of return due to a higher rate of inflation, when an amount of money is invested.
4. Fraud risk: it describes the risk that is associated with investing an amount of money in a product, stock, company, etc., without doing a background check or due diligence.

What is risk management?

Risk management can be defined as a strategic process which involves the identification, evaluation, analysis and control of potential threats (risks) that are present in a business, project, or system, as an obstacle to its capital, revenues, success, and profits.

Based on the information provided in the article, the four (4) categories of risk explained include the following:

• Market risk: this is a risk that limits the ability of an investment to increase in value, thereby, leading to loss of money in the long-run.

• Financial or business risk: it describes the risk that is associated with investing an amount of money in a private business, so as to gain a lot of profit in the long run.

• Inflation risk: it describes the risk that is associated with a lower rate of return due to a higher rate of inflation, when an amount of money is invested.

• Fraud risk: it describes the risk that is associated with investing an amount of money in a product, stock, company, etc., without doing a background check or due diligence.

Read more on risk here: brainly.com/question/16352505

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