Describing risk to measure risk we should know 1 all the, Ask an Expert

Economics

Describing Risk

* To measure risk we should know:

1) All the outcomes which are possible.

2) The probability that each outcome will occur.

* Interpreting Probability

- The probability of the given outcome to occur

* Interpreting Probability

- The probability which the given outcome will occur

- Objective Interpretation

Based on frequency which is observed of past events

- Subjective

Based on experience or perception with or without an observed frequency

- Different information or abilities to process the same information can influence subjective probability

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9511051

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