risk

1. General: Probability or threat of a damage, injury, liability, loss, or other negative occurrence, caused by external or internal vulnerabilities, and which may be neutralized through pre-mediated action.

2. Finance: Probability that an actual return on an investment will be lower than the expected return. Financial risk is divided into the following general categories: (1) Basis risk: Changes in interest rates will cause interest-bearing liabilities (deposits) to reprice at a rate higher than that of the interest-bearing assets (loans). (2) Capital risk: Losses from un-recovered loans will affect the financial institution's capital base and may necessitate floating of a new stock (share) issue. (3) Country risk: Economic and political changes in a foreign country will affect loan-repayments from debtors. (4) Default risk: Borrowers will not be able to repay principal and interest as arranged (also called credit risk). (5) Delivery risk: Buyer or seller of a financial instrument or foreign currency will not be able to meet associated delivery obligations on their maturity. (6) Economic risk: Changes in the state of economy will impair the debtors' ability to pay or the potential borrower's ability to borrow. (7) Exchange rate risk: Appreciation or depreciation of a currency will result in a loss or an naked-position. (8) Interest rate risk: Decline in net interest income will result from changes in relationship between interest income and interest expense. (9) Liquidity risk: There will not be enough cash and/or cash-equivalents to meet the needs of depositors and borrowers. (10) Operations risk: Failure of data processing equipment will prevent the bank from maintaining its critical operations to the customers' satisfaction. (11) Payment system risk: Payment system of a major bank will malfunction and will hinder its payments. (12) Political risk: Political changes in a debtor's country will jeopardize debt-service payments. (13) Refinancing risk: It will not be possible to refinance maturing liabilities (deposits) when they fall due, at economic cost and terms. (14) Reinvestment risk: It will not be possible to reinvest interest-earning assets (loans) at current market rates. (15) Settlement risk: Failure of a major bank will result in a chain-reaction reducing other banks' ability to honor payment commitments. (16) Sovereign risk: Local or foreign debtor-government will refuse to honor its debt obligations on their due date. (17) Underwriting risk: New issue of securities underwritten by the institution will not be sold or its market price will drop.

3. Food industry: Function of the probability of an adverse effect and the magnitude of that effect, consequential to a hazard in food (FAO/WHO definition).

4. Insurance: Situation where the probability distribution of a variable (such as burning down of a building) is known but its mode of occurrence or actual value (whether the fire will occur at a particular property) is not. A risk is not an uncertainty (where neither the probability nor the mode of the occurrence is known), a peril (cause of loss), or a hazard (agent or condition that makes the occurrence of a peril more likely or more severe).

5. Securities trading: Quantifiable likelihood (probability) of a loss or stagnation in value. Trading risk is divided into two general categories (1) Systemic risk: Affects all securities in the same class and is linked to the overall capital-market system and which, therefore, cannot be eliminated by diversification. Measured by beta coefficient, it is also called market risk or (erroneously) systematic risk. (2) Non-systemic risk: Any risk that is not market-related or is not systemic. Also called non-market risk, extra-market risk, (mistakenly) non-systematic risk, or un-systemic risk.

6. Workplace: Product of the impact of the severity (consequence) and impact of the likelihood (probability) of a hazardous event or phenomenon. For carcinogen effect, risk is estimated as the incremental probability of an individual developing cancer over a lifetime (70 years) as a result of exposure to a potential carcinogen. For non-carcinogen effect, it is evaluated by comparing an exposure level over a period to a reference dose derived from experiments on animals.

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