INTRODUCTION TO ENTREPRENEURSHIP
IMPORTANCE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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1. Risk refers to the variability of outcomes (or returns); and is important for a firm to weigh risks in decisions.
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2. if there is risk, the returns are certain.
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3. A firm operating in a risk-free environment will never expand.
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4. Risk is lot of knowledge about current conditions.
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Detailed explanation-1: -Answer : c Plan Risk Response is the process of developing options and actions to enhance opportunities and to reduce the threats to project objectives .
Detailed explanation-2: -Definition: Risk implies future uncertainty about deviation from expected earnings or expected outcome. Risk measures the uncertainty that an investor is willing to take to realize a gain from an investment.
Detailed explanation-3: -Comment: Risk is a possibility, not a certainty. It may or may not occur.
Detailed explanation-4: -Understanding Variability The risk premium refers to the amount required to motivate investors to place their money in higher-risk assets. If an asset displays a greater variability of returns but does not show a greater rate of return, investors will not be as likely to invest money in that asset.