In which situation is an entrepreneur's risk considered calculated and sensible?
Answer and explanation
Correct answer: Investing limited money after checking demand and cost
A calculated risk is based on relevant information, a clear assessment of demand and cost, and an investment level that the entrepreneur can manage. Limiting the initial amount also allows learning and reduces the possible loss. Investing everything without evidence, copying others blindly, or assuming guaranteed profit ignores uncertainty. Sensible risk does not eliminate loss; it makes the decision deliberate and manageable.
Frequently asked questions
What is the correct answer to this question?
Investing limited money after checking demand and cost
Why is this the correct answer?
A calculated risk is based on relevant information, a clear assessment of demand and cost, and an investment level that the entrepreneur can manage. Limiting the initial amount also allows learning and reduces the possible loss. Investing everything without evidence, copying others blindly, or assuming guaranteed profit ignores uncertainty. Sensible risk does not eliminate loss; it makes the decision deliberate and manageable.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Business, Trade and Commerce. Topic: Business Risk.
