Issues in Risk Analysis
Risk refers to a situation in which possible future events can be defined and probabilities assigned (Keat & Young, 2009). It is the chance that an investment's actual return will be different than expected (Risk, 2013). With risk comes the possibility of losing some or all investments (Risk, 2013). Uncertainty refers to situations in which there is no viable method of assigning probabilities to future random events (Keat & Young, 2009).
In order to understand the relationship between uncertainty and risk, first I would like to define risk. First, in technology and economics, risk is expressed as an expected value that an event will be accompanied by undesirable consequences (The Difference Between Risk and Uncertainty, 2013). Here it is measured by both the probability of the event and the seriousness of the consequences (The Difference Between Risk and Uncertainty, 2013). For example, the probability that a bearing will fail in five years is .001 percent (The Difference Between Risk and Uncertainty, 2013). In the second area of planning, risk is what can happen that will cause the project to fall behind schedule or go over cost. During planning, the known-unknowns are risk (The Difference Between Risk and Uncertainty, 2013). The final area is in management; risk is the possibility that outcomes will be different from what we expect. It is the effort to manage both the known-unknowns and unknown-unknowns (The Difference Between Risk and Uncertainty, 2013).

Risk analysis refers to the uncertainty of forecasted future cash flows streams, variance of portfolio/stock returns, statistical analysis to determine the probability of a project's success or failure, and possible future economic states (Risk Analysis, 2013). It is the study of the underlying uncertainty of a given course of action (Risk Analysis, 2013). Risk analysts often work