Multiple choice

Risk is equated with

  1. volatility of earnings

  2. level of earnings

  3. the number of investors in a fund

  4. the number of schemes of a fund family

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A Correct answer
Explanation

In finance, risk is fundamentally measured as the volatility or variability of earnings/returns. Higher volatility means greater uncertainty about future outcomes, which defines risk. The other options, level of earnings, number of investors, or number of schemes, are stability or scale metrics, not risk measures.