The Economist Frank Knight and Others Sometimes Make a Distinction

Multiple Choice

The Economist Frank Knight and others sometimes make a distinction between risk and uncertainty:

A) Risk involves the huge volatility, whereas uncertainty is more like a feeling of queasiness.
B) Risk involves probabilities that are unknown and outcomes that are unknown, whereas uncertainty involves probabilities that are known and outcomes that are known.
C) Uncertainty uses standard deviations and expected values, whereas we can compute these in situations involving risk.
D) Uncertainty involves probabilities that are unknown and outcomes that are unknown, whereas risk involves probabilities that are known and outcomes that are known.