ANALYSIS OF RISK &

UNCERTAINTY

Rocel Dag-ay
celdagz17@yahoo.com; +63 956 421 0826
UNCERTAINTY
State of being uncertain
We know how to start……..
Decision Making
ESCAPING
 What is it in for ME

 the function of the entrepreneur is to meet

those risk which are non insurable and
which are called uncertainties

Uncertainty arises when actual conditions

differ from anticipated conditions
 Sources of UNCERTAINTY

Uncertain Pattern -
 definite about certain events but uncertain
about their pattern

Existing Facts and Future Plan

 belief of certainty and uncertainty about events
is influenced by facts already available and
future plan
 Sources of UNCERTAINTY

Bias of Self-interest
 our experience of past events are modified by
our personal feeling and prejudice

Belief about an Even Either Help or Harm:

 there is the maximum feeling of uncertainty when
we believe that an event may either harm or help
us- EQUALLY LIKELY
RISK
• Situation involving exposure to danger
 Types of Risk
1. Pure Risk or Static Risk - Pure risk prevails where there
is a probability of loss but no chance of gain.

2. Speculative Risk or Dynamic Risk - A speculative risk

exists where there is even chance for both gain and
loss.
3. Insurable Risks - Transferable risks are also known as
insurable risks. Such risks can be predicted,
estimated and measured in terms of money and so
are insurable.
 Risk vs. Uncertainty
Risk
Must make a decision for which the outcome is not
known with certainty
Can list all possible outcomes & assign probabilities to
the outcomes

Uncertainty
Cannot list all possible outcomes
Cannot assign probabilities to the outcomes