Final answer:
Risk is an investor's uncertainty about the economic gains or losses that will result from a particular investment. It measures the range of potential payoffs that is reasonably probable, and investors should consider it along with potential returns when making investment decisions.
Step-by-step explanation:
The investor's uncertainty about the economic gains or losses that will result from a particular investment is called risk. Risk measures the uncertainty of a project's profitability and refers to the range of potential payoffs that is reasonably probable for a high-risk investment. It is important for investors to consider both the potential return and the level of risk associated with an investment when making financial decisions.