Risk is the potential for an investment to generate more than one return. A security that will prod return is referred to as a risk-free asset, as there is no potential for deviation from the known expected out Investments that have the chance of producing more than one possible outcome a potential variability in an investment's possible returns, occurs when there is uncertainty about an i future outcome, such as the return expected to be generated by the investment and realized by an investor. re called risky assets. Risk, or As an investor and based on your understanding of risk, which of the following statements is true? O S8P 500 companies that are considered to be riskier than the others will have a lower expected rate of return than the others. O S8P 50 O companies that are considered to be riskier than the others will have a higher expected rate of return than the others. Read the following descriptions and identify the type of risk or term being described: Description Terms This type of risk relates to changes in the interest rate This type of risk is inherent in a firm's operations The difference between the expected rate of return on a given risky asset and the expected rate of return on a less risky asset A standard measure of the risk per unit of return You invest $100,000 in only one stock. What kind of risk will you primarily be exposed to? O Stand-alone risk O Portfolio risk Generally, investors would prefer to invest in assets that have: O A lower-than-average expected rate of return given the perceived risk O A higher-than-average expected rate of return given the perceived risk