Most commonly used terms in Risk Management: The entire paradigm, of risk management is very complex and consists of terms which could be properly understood in coherence. Since risk management is closely related to financial losses, I have included terms related to the stock markets just to ensure a better understanding of the financial instruments present in the market. Here is an attempt to put together the most commonly used terms in risk management: Risk: Uncertainly of occurrence of an event whether positive or negative (In business perspective, risk is generally considered to be an event which exposes you to a negative position) Rewards: The returns expected with investments which have been materialized Potential Loss: Any deficit of funds which has may or may not been accounted or estimated prior to occurrence of event Probability : Likelihood of occurrence of a risk event / Possibility of in a position of ex...