Business: Theory and Practice 12(2): 141-149, doi: 10.3846/btp.2011.15
Peculiarities of Risk Concept Formation
expand article infoDaiva Rasciauskaite, Viktorija Stasytyte
‡ Vilnius Gediminas Technical University, Lithuania
Open Access
Abstract

The paper analyses the essence of risk concept in the context of social sciences, focusing on risk contents in investment science. The classic distinction  between  risk and uncertainty concepts is presented; the relation of risk  with reliability (guarantee) is disclosed. Various possible measures of risk are also analysed, providing the features a coherent risk measure should possess. After thorough investigation of various scientists’ points of view, a definition of risk as an extent of loss for the subject is being proposed. While describing possible loss with the help of probability distribution, an accumulated distribution function is proposed for measuring and expressing the extent of loss, presenting the parameters of probability distribution as stochastic values.

Keywords
risk, uncertainty, trust, reliability (guarantee), probability distribution, loss