The key distinction between risk and uncertainty is
A)risk cannot be quantified,priced or traded
B)uncertainty refers to not knowing possible outcomes or their probabilities
C)uncertainty is modeled by listing the possible outcomes and assigning probabilities to the outcomes
D)risk has to do with not knowing the probability distribution of a random variable

Question

Quizplus · Accepted Answer

Risk refers to the possibility of loss or harm occurring, while uncertainty refers to a lack of knowledge or information about possible outcomes or their probabilities. While risk can often be quantified and priced, uncertainty cannot be easily modeled or assigned probabilities.

The Key Distinction Between Risk and Uncertainty Is