Match each word with its best definition.

1. Risk
2. Personal finances
3. Opportunity cost
4. Budget
5. Income

A. An individual's assets and management of them
B. Money earned
C. The chance or possibility of loss
D. A plan that balances available resources and expenses
E. The cost of using one resource over another

Risk represents the likelihood of negative outcomes, opportunity cost refers to the cost of choosing one option over another, and a budget is an organized plan of income and expenses.

Explanation:

Risk: The likelihood of something bad happening. In finance, risk can be associated with the dispersion in possible outcomes, indicating higher risk with greater dispersion.

Opportunity Cost: The cost of choosing one alternative over another. For example, when deciding to invest in stocks, the opportunity cost may be the potential return on bonds foregone.

Budget: An itemized plan of income and expenses for a specific period. Budgeting helps individuals or entities balance their available resources with expenses.

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