Risk

The notion of risk in finance is very close of incertainty. The risk of a financial investment can have various origins. We distinguish the economic risks (political, natural, inflation…) which threaten security flow and refer to economic world, with financial risks (liquidity, exchange, rate...), they don't have an impact on this flow but they concern only the financial sphere. Risk is the possibility that the actual return on an investment will be different from its expected return. A vitally important concept in finance is the idea that an investment that carries a higher risk (volatility) has the potential of a higher return.