• Risk assessment is the process of analyzing potential events that could lead to the loss of an asset, loan or investment.

  • Companies, governments and investors conduct risk assessments before embarking on a new project, business or investment.
  • Quantitative risk analysis uses mathematical models and simulations to assign numerical values to risks.
  • Qualitative risk analysis relies on human subjective judgment to build a theoretical risk model for a given scenario.
  • Although past stock volatility does not guarantee future returns, in general, investments with high volatility indicate riskier investments.