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Describing Risk
* To measure risk we should know:
1) All the outcomes which are possible.
2) The probability that each outcome will occur.
* Interpreting Probability
- The probability of the given outcome to occur * Interpreting Probability
- The probability which the given outcome will occur
- Objective Interpretation
- Subjective
- Different information or abilities to process the same information can influence subjective probability
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ive been asked to compare shapes of graphs e.g. constant slopes increasing, decreasing, inelastc using the concepts of marginal and average changes?
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