Many people don't differentiate between Risk & Uncertainty. For them, both are one & the same thing, actually, it is not. There is a lot of difference between the two.
RISK:
Risk is the possibility of a number of different outcomes resulting from a given action. The chance of actual return may differ from the expected return. There could be a possibility of losing some or all of the investment.
Risk is also the volatility associated with the prices/returns of investments.
A risk is an event whose outcome is known to you
UNCERTAINTY:
One can not predict uncertainty and hence the outcome is not known in advance.
Risk is not inherently bad and need not be avoided totally. What do you think which one is riskier - driving a car or traveling in an airbus?
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