The terms 'risk' and 'uncertainty' might appear synonymous, but in fact theorists tend to define them individually. Where there is a problem with many possible outcomes, the availability of past information is an important factor. Where past experience exists to facilitate the production of statistical evidence to support prediction of outcomes, this tends to be an assessment of risk. Where, however, there is little such statistical evidence to assist with problem-solving, this tends to be indicative of uncertainty.

The terms 'risk' and 'uncertainty' might appear synonymous, but in fact theorists tend to define them individually. Where there is a problem with many possible outcomes, the availability of past information is an important factor. Where past experience exists to facilitate the production of statistical evidence to support prediction of outcomes, this tends to be an assessment of risk. Where, however, there is little such statistical evidence to assist with problem-solving, this tends to be indicative of uncertainty. (a) Outline the typical pattern or structure of financial decisions. Your outline should include a consideration of both risk and uncertainty