If the future cash flows from an investment are uncertain, then the investment is risky. As a result, if the cash flows are uncertain then there's also higher risk involved.

This means there is uncertainty about the future cash flows or that the future cash flows could be different from expected cash flows. The degree of uncertainty varies from investment to investment. This is all the essence of risk.

Discuss the impact of risk on both the stock and bond markets focusing on beta, the time value of money and ratings from the credit rating agencies.