The more an observation deviates from what we expected, the more risky we deem the outcome to be.

Question

Quizplus · Accepted Answer

This statement aligns with the concept of risk in statistics and decision theory, where risk is often associated with the uncertainty or variability in outcomes. An observation that deviates significantly from what is expected indicates a higher level of uncertainty or variability, thus being perceived as more risky.

The More an Observation Deviates from What We Expected, the More