Main Article Content
Abstract
Risk is defined as the probability of deviation in the expected result and actual result of any activity. If the outcome of any activity is known and if there is no deviation expected in expected and actual result of any activity, this is called as certainty. The simple understanding is that the actual result of the activity would be as per the expected result and there would be no deviation. Just opposite to it, there is the situation of uncertainty where the outcome is not at all known and in between these two situations, there is the situation of risk. In risk, there is probability attached to each known outcome of the activity. Risk is not the situation of unknowingness. Here, the outcomes of the activity are known and probabilities are attached to specific outcomes. Risk is also defined as the probability of loss due to happening of an event. The loss can be financial, physical, social etc. Risk is that in want of earning higher profit, there may be loss of money. The probability of gap between expected result and actual result of any activity is the risk. Risk cannot be eliminated completely but to manage risk, there are a number of ways. Diversification is the simplest technique of risk management being followed since time immemorial. It is based on the principle of not keeping all eggs in one basket.