ENTREPRENEURSHIP

Detailed explanation-1: -In the case of risk, the outcome is unknown, but the probability distribution governing that outcome is known. Uncertainty, on the other hand, is characterised by both an unknown outcome and an unknown probability distribution. In both cases, preferences are defined across chance distributions of outcomes.

Detailed explanation-2: -Risk traditionally has been defined in terms of uncertainty. Based on this concept, risk is defined as uncertainty concerning the occurrence of a loss. For example, the risk of being killed in an auto accident is present because uncertainty is present.

Detailed explanation-3: -Risk is the uncertainty regarding the occurrence of financial loss.

Detailed explanation-4: -In the financial world, risk refers to the chance that an investment’s actual return will differ from what is expected-the possibility that an investment won’t do as well as you’d like, or that you’ll end up losing money.