Final answer:
The statement is true; risk pertains to the uncertainty regarding the actual returns of an investment, which can fluctuate due to factors like default and interest rate risks. The expected rate of return is a projection that may not match the eventual actual rate of return.
Step-by-step explanation:
The statement that risk can be defined as uncertainty concerning the actual return that an investment will generate is true. Risk measures the uncertainty of an investment's profitability. The expected rate of return is a forecast of what an investment is projected to yield in terms of future interest payments, capital gains, or increased profitability, expressed typically as a percentage rate over a defined period.
However, the actual rate of return may differ from this expectation due to various risks, including default risk, where the borrower might fail to repay the bond or loan, and interest rate risk, where interest rates might rise after a bond purchase, leading to opportunity loss. A high-risk investment has substantial variability in returns, while a low-risk investment's actual returns tend to be more consistent with the expected rate of return.