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What is a Calculated Risk?

 , April 11, 2017
A calculated risk is an action or strategy that is pursued after careful consideration of risks. Generally speaking, a calculated risk is taken when it is decided that potential rewards of an action outweigh risks. Such decisions are influenced by risk tolerance and the availability of less risky alternatives.


A business unit decides that there is a 70% chance that a $400,000 project will fail. If the project succeeds it will save the firm at least $10 million. The business unit decides to take the calculated risk of proceeding with the project. Every effort is made to reduce risk but the team realizes that failure is a possibility.
Overview: Calculated Risk
TypeRisk Management
DefinitionAn action or strategy that is taken after careful consideration of the risks involved.
Related ConceptsRisk Taking
Risk Identification
Risk Matrix
Risk-Reward Ratio
Risk Treatments
Failure Is Not An Option


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