Final answer:
An internal risk is an event or condition originating within an organization or individual that could negatively impact operations or success. In a business context, poor management decisions can be an example of this. Conversely, external risks such as natural disasters or economic crises are outside the control of individuals or organizations.
Step-by-step explanation:
An internal risk within any organization or project can be defined as an event or condition that originates from within and could negatively impact the organization's operation or success. Internal risks are often within the control of the organization, as opposed to external risks, which are not. For example, in a business context, internal risks can include inadequate management or poor decision-making, which could result in diminished performance and value of a company.
Throughout history, high levels of risk have at times proven to be detrimental to an investment portfolio. For instance, highly speculative or leveraged investments may lead to substantial losses, overshadowing gains from other assets in the portfolio. Such risks are internal to the portfolio, as they are a result of the strategic decisions made by the investor or the investment manager.
An example of economic risks over which an individual has little control is the risk of a country experiencing a natural disaster, war, or massive unemployment. These are external risks that an individual cannot prevent or alter. In contrast, a risk like low career resilience due to inflexibility in adapting goals is an internal risk, as it stems from personal decisions and behaviors.