The term "risk" is used interchangeably with "uncertainty" to refer to the variability of returns associated with a given asset.

Question

Quizplus · Accepted Answer

Risk and uncertainty are related concepts but they have slightly different meanings. Risk refers to the variability of returns that can be calculated or estimated based on past data or probabilities, while uncertainty refers to the lack of information or knowledge about future events or outcomes. However, in finance and investment, the terms risk and uncertainty are often used interchangeably to refer to the potential variability of returns associated with a particular asset or investment.

The Term "Risk" Is Used Interchangeably with "Uncertainty" to Refer