What does the term "risk" mean in the context of capital budgeting; to what extent can risk be quantified; and, when risk can be quantified, is thequantification based primarily on statistical analysis of historical data, or, on subjective judgmental estimates?

To answer these questions you should consider the following:

• What are the three types of risk that are relevant in capital budgeting?
• How is each of these risk types measured, and how so they relate to one another?
• Howiseachtypeofriskusedinthecapitalbudgetingprocess?

** One - two paragraph response