Involves determining which risks are likely to affect a project and documenting the characteristics of each.

Risk identification involves determining which risks are likely to affect a project and documenting the characteristics of each. To identify means to recognize and in this situation to identify a risk would mean to assess the situation and recognize which risks might affect your project and how you would solve them in case they happened to you.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

The answer is  passage 1.