Why do the heightened risk about gains or losses from market transactions is less than increased uncertainty to induce people to stop trading in the affected market?
Concept introduction:
Uncertainty is a potential, unpredictable, and uncontrollable outcome; Risk is an outcome of move made notwithstanding vulnerability. Risk observation is the subjective judgment individuals make about the seriousness and likelihood of a hazard, and may differ from individual to individual. In this way, to put it plainly, risk depicts a circumstance, in which there is a shot of misfortune or peril. On the other hand, uncertainty alludes to a condition where you don't know about the future results.
Basis for Comparison | Risk | Uncertainty |
Meaning | The probability of winning or losing something worthy is known as risk. | Uncertainty suggests a circumstance where the future occasions are not known. |
Ascertainment | It can be measured | It cannot be measured. |
Outcome | Chances of outcomes are known. | The outcome is unknown. |
Control | Controllable | Uncontrollable |
Minimization | Yes | No |
Probabilities | Assigned | Not assigned |
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