what is buisness risk? what is its nature?
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Business risk can be defined as uncertainties or unexpected events which are beyond control .
Nature
1) arise due to uncertainties- business risks are uncertain . Uncertainty means when you are not sure what is going to happen in future
2) risk is an essential part of business- risk can never be eliminated . it can be reduced but not removed.
3) degree of risk depends on the nature and size of business- large scale business has higher risk
And small scale business has lower risk
4) profit is the reward for bearing risks - the higher the risk the higher is the profit. No risk , no gain
Nature
1) arise due to uncertainties- business risks are uncertain . Uncertainty means when you are not sure what is going to happen in future
2) risk is an essential part of business- risk can never be eliminated . it can be reduced but not removed.
3) degree of risk depends on the nature and size of business- large scale business has higher risk
And small scale business has lower risk
4) profit is the reward for bearing risks - the higher the risk the higher is the profit. No risk , no gain
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