Definition Of Risk By Different Authors

Definition Of Risk By Different Authors

Risk is the uncertainty of expected future events. Risk arises from uncertainty. There is a difference between risk and uncertainty. First, all uncertainty is not risk. Uncertainty cannot be measured, whereas risk can be measured. Uncertainty is the fear of something unexpected happening. The portion of uncertainty that can be measured is called risk.

Difference Between Risk and Uncertainty:

Risk means the possibility of financial loss. Businessmen take risks to make a profit and earn profit as a reward for taking the risk. Risk can be insured against to reduce its impact.

Uncertainty is the probability that a future event will or will not happen. The consequences of uncertainty remain unknown. Since uncertainty cannot be measured, it cannot be reduced.

Definition Of Risk By Different Authors

According to J.J Hampton, “Risk can be defined as the possibility that the actual return from an investment is less than the expected return.”

J.C Van Horne defines, “Risk is the variability of potential returns of a project.”

Weston & Brigham define, “Risk is the chance that some unfavorable event will occur.”

According to Lawrence, 1976, “Risk is the measure of probability and the weight of undesired consequences.”

According to Risk Management Vocabulary ISO 2002, “Risk is a combination of the probability and scope of the consequences.”

Definition Of Risk By Different Authors

Campbell, 2005 defines, “Risk equals expected damage.”

Aven & Renn, 2009 define, “Risk refers to uncertainty about and severity of the events and consequences (or outcomes) of activity with respect to something that humans value.”

Rosa 1998 defines, “Risk as a situation or event where something of human value (including humans themselves) has been put at stake and where the outcome is uncertain.”

According to Risk Management, ISO, 2009, “Risk is the effect of uncertainty on objectives.”

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