**Preface to "Risk and Financial Consequences"**

Risk is a term that exists in everyone's life, not only when an unexpected event occurs, but in any decision someone has to make. Among those studying or working in the financial sector, there is widespread knowledge regarding the rational investor's preferences. Regardless of the business sector in which they will choose to invest, an investor's main goal is to maximize their profits. For this reason, investors are characterized in the literature as "risk averters". Hedging and portfolio diversification appear to be efficient in reducing the potential loss of an investment. Considerable attention has been drawn to the advantages of portfolio diversification, while researchers have mentioned the ability of transferring the risk of investment through hedging, emphasizing that the size of the optimal hedging ratio is one of the main determinants used by decision makers, in addition to the financial situation of the corporation. However, there are some cases which cannot be predicted. Society, which refers to nature's actions and human activities, is characterized by vulnerability and rapid changes. Nature acts independently; a common example of this independence is tectonic plate movement. Thus, natural actions that cannot be predicted may cause significant losses, both economic and life-related. Economic losses can be due to many factors, such as the partial or total destruction of homes or business premises that will lead to reduced, if not zero, productivity. In the case of businesses, reduced productivity may affect investors'perceptions, causing fluctuations in the share price or even volatility in the board of directors.

> **George Halkos** *Editor*
