Terms Description This type of risk relates to fluctuations in exchange rates. This type of risk is inherent in a firm's operations. Systematic risk A measure of the variability of a set of outcomes. Risk premium The difference between the expected rate of return on a given risky asset and the expected rate of return on a less risky asset. You invest $100,000 in only one stock. What kind of risk will you primarily be exposed to? Portfolio risk Stand-alone risk Generally, investors would prefer to invest in assets that have: a higher-than-average expected rate of return given the perceived risk. a lower-than-average expected rate of return given the perceived risk