Human beings are considered the most intelligent creatures, on this earth. The thinking power available to human beings is enormous and this has led human beings to define their style of living and distinguish between good and bad situations. The criteria for deciding whether the situation is good or bad depend upon individual's perception. However, one thing is sure-that human beings always prefer and strive for happy situations and wants to avoid the adverse ones. Actually, the zeal to be happy always has given birth to the jargon risk!
1.1 The Concept of Risk· People express risk in different ways. To some, it is the chance or possibility of loss, to others, 'its may be uncertain situations or deviations or what statisticians call dispersions from the expectations. Different authors on the subject have defined risk differently. However, in most of the terminology the term risk includes exposure to adverse situations. The indeterminateness of outcome is one of the basic criteria to define a risk situation. Also, when the outcome is indeterminate, there is a possibility that some of them may be adverse and therefore need special emphasis. Let us have a look at the popular definitions of risk. According to the Dictionary, risk refers to the possibility that something unpleasant or dangerous might happen. I "Risk is a condition in which there is a possibility of an adverse deviation from a desired outcome that is expected or hoped for. "2 "At its most general level, risk is used to describe any situation where there is uncertainty about what outcome will occur. Life is obviously risky. "3 The degree of risk refers to the likelihood of occurrence of an event. It is a measure of accuracy with which the outcome of a chance event can be predicted. In most of the risky situations, two elements are commonly found·:
1. The outcome is uncertain i.e. there is a possibility that one or other(s) may occur. Therefore, logically, there are at least two possible outcomes for a given situation.
2. Out of the possible outcomes, one is unfavorable or not liked by that; individual or the analyst.
1.2 Risk vs. Uncertainty Uncertainty is often confused with the risk. Uncertainty refers to a situation where the outcome is not certain or unknown. Uncertainty refers to a state of mind characterized by doubt, based on the lack of knowledge about what will or what will not happen in the future.
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