For example, you can be driving down the road and out jumps that stop sign. You can slow down really quickly or you cruise on through and take your chances. The risk of stopping at the stop sign is low and relatively unknown. You could be car jacked, hit from behind or even late for an appointment. The levels of risk vary depending on your location and the importance of your meeting. On the other hand, you can drive thru the stop sign and your probability of risk increases dramatically.

More simply said when someone pursues and opportunity for benefit (reward), he or she usually faces threats to its success (risks). Since risk is virtually everywhere, risk assessors/managers are brought into help people and organizations evaluate a situation and determine the amount of risk. Risk management is a method for addressing positive and negative aspects of an uncertainty.  Two elements of risk are: uncertain outcome & possibility of loss.

CRUX: If risk exists, the outcome is uncertain, and the product could be something unfavorable.