In which situation would taking a risk be considered wise for an entrepreneur?
Answer and explanation
Correct answer: When the risk is estimated and a plan is made to reduce its impact
Wise risk-taking does not mean acting blindly. The entrepreneur gathers information, estimates the chance and possible effect of loss, compares alternatives, and prepares safeguards such as a budget or fallback plan. This can reduce, though not eliminate, uncertainty. Investing without information or hiding losses is irresponsible and cannot be called sound entrepreneurial decision-making.
Frequently asked questions
What is the correct answer to this question?
When the risk is estimated and a plan is made to reduce its impact
Why is this the correct answer?
Wise risk-taking does not mean acting blindly. The entrepreneur gathers information, estimates the chance and possible effect of loss, compares alternatives, and prepares safeguards such as a budget or fallback plan. This can reduce, though not eliminate, uncertainty. Investing without information or hiding losses is irresponsible and cannot be called sound entrepreneurial decision-making.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Business, Trade and Commerce. Topic: Business Risk.
