Defining the Concept of Risk Applied in Entrepreneurship Conceptual Delimitation Risk - Entrepreneurial Uncertainty

Tărăbîc Andrei Alexandru ()
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Tărăbîc Andrei Alexandru: West University of Timisoara

Ovidius University Annals, Economic Sciences Series, 2018, vol. XVIII, issue 2, 542-545

Abstract: Even though in many cases the terms of risk and uncertainty are similar, but they have to be delimited to understand the meaning of each individual as accurately as possible. The two terms are combined in different situations. No matter how well the risk is managed, uncertainty cannot be removed because all possible situations and interdependencies cannot be taken into account. Thus, a source of risk can be considered uncertainty in itself if it is based on poor quality information about the actual internal or external situation of the company. Also, in my conclusion, traditional financial theory distinguishes between systematic risk and the particular risk, which reaches the company's overall risk. Investors can reduce total risk with the two primary risk management instruments, namely diversification and asset allocation.

Keywords: entrepreneur; risk; uncertainty; SME’s (search for similar items in EconPapers)
JEL-codes: D81 L26 (search for similar items in EconPapers)
Date: 2018
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