What is a financial risk?

A financial risk refers specifically to the uncertainty associated with the potential for loss in an investment or business undertaking. It encompasses the scenarios where the expected returns could fail to materialize, resulting in a loss of capital. By understanding this definition, it's clear that the chance of losing money on an investment or business venture is the essence of financial risk.

The other choices highlight different aspects of finance but do not accurately define financial risk. While the possibility of making a profitable investment suggests potential positive outcomes, it does not capture the inherent risk of loss involved. The certainty of earning interest on savings implies a guarantee of returns, which eliminates the notion of risk altogether. High inflation rates represent an economic condition that can erode purchasing power but does not directly relate to the definition of financial risk associated with investments. Therefore, recognizing that financial risk is fundamentally about the chance of losing money clarifies why that option is the correct answer.