Section 5.1: Introduction to Risk and Risk Management
Section 5.1 Focus
This section focuses on different types of risk including inflation risk, investment risk, and pure risk. You will learn about human tendency of loss aversion, the risk-reward relationship, and methods of risk management.
Read
- Your Spending, Your Savings, Your Future (page 38)
- What Is Pure Risk? Definition, 2 Potential Outcomes, and Types Links to an external site.
- What is Risk? Securities and Exchange Commission Links to an external site.
- Determining Risk And The Risk Pyramid Links to an external site.
- 5 Basic Methods for Risk Management Links to an external site.
- Going All-In: Investing vs. Gambling Links to an external site. (Optional)
Watch
Watch the following two videos.