The meaning of risk and its relation with profit. Introduction: Risk refers to the lower probability rate of success associated with a new start up in any field. It involves the risk of loss of time as well as money for the non-profitable business. Profit refers to the income of the entrepreneur that they earn after all the payments to all factors of production are made. It is the amount that is above the sum total of all the payments to be made outside the business. Reward is the profit for an entrepreneur in return to handle the risk associated in the business.

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Chapter 1.1, Problem 3TP

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To determine: The meaning of risk and its relation with profit.

Introduction: Risk refers to the lower probability rate of success associated with a new start up in any field. It involves the risk of loss of time as well as money for the non-profitable business.

Profit refers to the income of the entrepreneur that they earn after all the payments to all factors of production are made. It is the amount that is above the sum total of all the payments to be made outside the business.

Reward is the profit for an entrepreneur in return to handle the risk associated in the business.

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