1. The probability or threat of loss, liability, damage or any other negative occurrence and that may be avoided through preemptive action. 2. The probability that an actual return on an investment will be lower than expected. 3. Can be divided into categories: emotional risk, relationship risk, physical risk, political risk, sovereign risk, operational risk, financial risk. 4. Risk can be reduced through preemptive action including; buying insurance, education, and experience.