ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Once we take into account that a project may fail, we take a calculated risk. Calculated risks are risks that we can take even if we fail. Indeed, there are people willing to risk everything, and some even succeed, in doing so, but one has to see the overall picture in mind and only then make a decision.

Detailed explanation-2: -Risk-taking in entrepreneurship is the process of identifying, evaluating, mitigating, and trying out potential opportunities and strategies that may help you build or grow your business but could also lead to personal or professional loss.

Detailed explanation-3: -Entrepreneurs are, in part, defined by their willingness to take risks. Risks aren’t necessarily things you’re afraid of. Risks that pay off can lead to increased revenue, business expansion and more. But a good entrepreneur doesn’t take risk without knowing what’s at stake and what the potential payoff can be.

Detailed explanation-4: -Calculated risk-taking is operationally defined as “The ability to deal with incomplete information and act on a risky option, that requires skill, to actualize challenging but realistic goals.” When you talk to people about what it means to be a “risk taker, ” most people will begin describing daredevils and gamblers.

Detailed explanation-5: -However, an entrepreneur always takes calculated risk. As per their skill, training and confidence, they try to minimize the risk.