Final answer:
Risk is typically highest at the start of a project and decreases as it progresses, but can spike again at the end. When evaluating investments, balancing risk with the expected rate of return is crucial, with safer investments having lower risk and the riskiest investments having a higher potential for loss.
Step-by-step explanation:
Risk on a project is typically highest in the beginning and decreases as the project progresses. This is mainly because there are more unknowns at the start of a project, and as the project moves forward and more information becomes available, the uncertainty usually decreases. However, there can be a spike in risk towards the end of the project due to factors such as deadlines, final product quality concerns, or integration issues. When considering investments, risk needs to be balanced with the expected rate of return. A high-risk investment tends to have a wide range of potential outcomes, while a low-risk investment typically has returns that are closer to the expected rate of return. The safest investment would have the lowest probability of incurring a loss, whereas the riskiest investment would have the highest probability of loss. To determine the highest expected return, one must calculate the expected value for each investment.