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'Risk' and 'Uncertainty'

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Can you help me with explaining the terms 'Risk' and 'Uncertainty' with a business example of each?

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Solution Summary

This solution of 240 words explains the terms of 'risk' and 'uncertainty' with a business example.

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Risk measures the deviation from expected value. For example, consider a stock, if its expected return is 10% a year, and in five particular years, its returns are 5%, 1%, 21%, 4% and 19% (average the five numbers and you will get 10%), you can see this stock bears a lot of "risk" because it deviates a lot from the average. On the other hand, another ...

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