The difference between "risk" and "uncertainty" in decision analysis alludes to the difference between:
A)knowledge and uncertainty.
B)pessimism and optimism.
C)known and unknown probabilities.
D)aggression and conservatism.

Question

Quizplus · Accepted Answer

Risk refers to situations where the probabilities of alternative outcomes are known, while uncertainty refers to situations where the probabilities of alternative outcomes are unknown. Therefore, the difference between risk and uncertainty alludes to the difference between known and unknown probabilities. Choice A is incorrect because risk itself is a form of knowledge. Choice B is incorrect because both risk and uncertainty can lead to either pessimism or optimism depending on one's perspective. Choice D is incorrect because risk and uncertainty are not necessarily associated with aggression or conservatism.

The Difference Between "Risk" and "Uncertainty" in Decision Analysis Alludes