5.1 Describing Risk Probability-Likelihood that a given outcome will occur. Economist Frank Knight distinguished between uncertainty and risk some 60 years ago. Uncertainty can refer to situations in which many outcomes are possible but their likelihoods unknown. Risk then refers to situations in which we can list all possible outcomes and know the likelihood of each occurring () 5.1 Describing Risk ❑ Probability-Likelihood that a given outcome will occur. ❑ Economist Frank Knight distinguished between uncertainty and risk some 60 years ago. ✓ Uncertainty can refer to situations in which many outcomes are possible but their likelihoods unknown. ✓ Risk then refers to situations in which we can list all possible outcomes and know the likelihood of each occurring (事件)