Give two examples of uncertainty?
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Answer:
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Explanation:
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Answer:
The two examples of uncertainty are,
- A business man stepping into a trade sector the man knows nothing about.
- An investment in a fairly new stock without any estimation of the further outcomes.
Explanation:
Uncertainty is often confused with risk. Risk, being a part of the uncertainty isn’t completely similar to the actual meaning of it. And hence the businessmen fail to see the difference between them and steer clear.
This is provided that the uncertainty is a genuine one. They are broadly classified into two types, risk and genuine. A risk is where the further outcomes are known and calculated.
This can be related to the first example where a businessman tries to step into a new sector as a form of expansion. The sector can be judged by examining its present conditions and calculated if the company can operate in the sector during current times.
The genuine uncertainty can be associated with the second example where the outcomes are not previously known and the stock can go in any direction. These types of uncertainties are usually just hit or miss but their potential is much higher than the risk uncertainties.