(a) Risk refers to the probability that the realised profits are less than the expected profit. When an entrepreneur sets up a venture, he is not sure of its success. There is no assurance of returns or profits. Moreover, he also takes up the risk of choosing entrepreneurship as a career over practice of a profession that involves an assured pay off. However, an entrepreneur always takes calculated risk. As per their skill, training and confidence, they try to minimize the risk. For example, an entrepreneur might enter into prior contracts with the customers and thereby, ensure the sale of the product. Thus, it can be said that entrepreneurs undertake moderate and calculated risk.
