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Risk versus Uncertainty

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Define risk and uncertainty and provide a business example.

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Solution Summary

Risk, by definition is possibility of loss or injury. Uncertainty is seen as indefinite, indeterminate, and not known beyond a doubt. Economics uses these terms frequently in that "risk is present when future events occur with measurable probability, and uncertainty is present when the likelihood of future events is indefinite or incalculable"

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Risk versus Uncertainty
Risk, by definition is possibility of loss or injury. Uncertainty is seen as indefinite, indeterminate, and not known beyond a doubt. Economics uses these terms frequently in that "risk is present when future events occur with measurable probability, and uncertainty is present when the likelihood of future events is indefinite or incalculable" ...

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