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State the term- Dealing with general risk
Part of the strategic decision making process is to analyse all risk factors involved with pursuing a specific course of action.
Risk is when actual outcome differs to the expected outcome. Business will make a decision on which the outcome isn't known with certainty, for illustration investing in a new project, entering a new market etc.
In order to grow some risk has to be taken though the key is management of the risk and company's attitude towards risk (i.e. Riskseekers or riskaverse).
Define why we measure a project’s risk as the change in the CV. We calculate a project’s risk as the change in the coefficient of variation since this focuses on the change in
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