Answer True/False to the following question.A risk is a statement about a probability.

Which of the following statements about the ‘What is Risk?’ section of the lecture material are TRUE:There is risk whenever there is some uncertainty about outcomes.A situation in which the value of an asset can either remain the same or decreases over a period of time can be described as ‘Pure Risk’.Question 1AnswerNeither of the statements are true (both are false)Only statement 1 is trueOnly statement 2 is trueBoth statements are true (neither are false)

Which of the following statements about the ‘What is Risk?’ section of the lecture material based on the diagram below are TRUE:A risk-averse individual would always prefer A to B because they both offer the same expected reward while B has a higher level of risk than A.A risk-averse individual would always prefer A to C because A has a significantly lower level of risk than C.Question 2AnswerNeither of the statements are true (both are false)Only statement 1 is trueOnly statement 2 is trueBoth statements are true (neither are false)

Explain the difference between uncertainty and risk*Your answer

Which of the following statements about the ‘What is Risk?’, ‘Risk and Human Bias’ and ‘What is Risk Management?’ sections of the lecture material are TRUE:If the probability of a pure-risk event occurring is ‘almost certain’ but the impact is only ‘minor’ then it would normally only require a low level of risk management planning because it only has a minor impact.An individual can either lose $100 for certain (with 100% probability) or take a gamble. The gamble involves a 10% probability of losing $1,000 and a 90% probability of losing $0. A typical person exhibiting human bias would usually take the gamble, even though the rational risk-averse choice would be to take the certain loss of $100.

Which of the following best describes risk in decision making?Question 33Answera.It involves unknown probabilities for possible outcomes.b.It involves known probabilities for possible outcomes.c.It is easily quantifiable and predictable.d.It is characterized by unpredictable outcomes.