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(29)Approximately 80 percent of all new restaurants have gone out of business within five years of their founding.Obviously, starting a new restaurant is a risky

(29)Approximately 80 percent of all new restaurants have gone out of business within five years of their founding.Obviously, starting a new restaurant is a risky enterprise.

(a)How should we measure the amount of this risk in the case of restaurants?

(b) Would you propose a different measure for the risk attached to a U.S. Marine deployed in Afghanistan?

(c)What about purchasing a new home?

What are the economic principles attached to these measurements?

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