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9 Examples of Risk Taking

 , September 01, 2016 updated on August 12, 2020
Risk taking is an undertaking which has a probability of a loss. In most cases, this also involves some probability of a gain. The following are the common types of risk taking with examples of each.


All actions are surrounded in risk. For example, crossing the street is risk taking whereby you could be injured.


Inaction is also surrounded in risk such that risk taking is an inescapable element of life. For example, avoiding crossing the street by staying in bed may represent a risk to your education or career.

Calculated Risk Taking

As risk surrounds all action and inaction, the best that an individual can do is try to pick the risks that are the most likely to create rewards and least likely to create losses. This is known as calculated risk taking and implies that you have taken steps to manage risk. For example, a parent who always puts life jackets on themselves and their children when they go boating.

Unmanaged Risk

Taking risk in an uncalculated and unmanaged way. This can include any risk taking that doesn't examine ways to reduce, mitigate, transfer or share risk. For example, driving in an unsafe manner without wearing your seatbelt. A failure to manage risk can be viewed as reckless, irresponsible or negligent.

Secondary Risk

Secondary risk is the risk that you create by managing risk. For example, if you stop jogging to reduce the risk of a knee injury you may increase your risk of becoming out of shape or unhealthy. Secondary risk is an important consideration in any risk management effort.

Minimax Criterion

A minimax criterion is a willingness to pay any price to minimize a dread risk. For example, people may only be willing to travel by plane if the risk of an accident has been minimized with no expense spared. This can be viewed as risk taking with large costs to try to minimize risk.

Maximax Criterion

A maximax criterion is acceptance of a large probability of a loss in exchange for maximizing your total potential gain. For example, buying a lottery ticket whereby you are almost certain to lose but their is an incredibly small chance of a large win.

Risk Tolerance

Between the extremes of a minimax and maximax criterion are many approaches to risk that are collectively known as risk tolerance. In most situations it doesn't make sense to minimize risk or maximize gains but rather to choose an approach with an attractive risk reward ratio whereby you are comfortable with potential losses. For example, a investor who doesn't want to take large risks with their investments but also needs to achieve a market average return.


Resilience is the ability to thrive under stress such as real life conditions. This can be increased with calculated risk taking. For example, a student who is scared of public speaking who nevertheless takes risks by volunteering to give presentations. This may help to build their resilience with time as an exercise in facing fears.
Overview: Risk Taking
DefinitionChoosing an action or inaction that involves the potential for a loss.
Related Concepts


This is the complete list of articles we have written about risks.
AI Risk
Risk Avoidance
Brand Risk
Budget Risk
Business Risks
Change Risk
Compliance Risk
Concentration Risk
Cost Risk
Country Risk
Credit Risk
Demand Risk
Dread Risk
Economic Risk
Exchange Rates
Existential Risk
External Risk
Financial Risk
Force Majeure
Good Risk
Health & Safety
Human Error
Risk Identification
Infinite Risk
Inflation Risk
Inherent Risk
Interest Rates
Internal Risks
Investing Risk
Legal Risk
Liquidity Risk
Model Risk
Natural Disasters
Negative Risk
Operations Risk
Passive Risk
Personal Risk
Political Risk
Process Risk
Procurement Risk
Product Risk
Project Risk
Pure Risk
Quality Risk
Risk Mitigation
Refinancing Risk
Regulatory Risk
Reputational Risk
Residual Risk
Resource Risk
Revenue Risk
Risk Appetite
Risk Aversion
Risk Examples
Risk Management
Risk Management Process
Risk Matrix
Risk Meaning
Risk Measurement
Risk Taking
Risk Tolerance
Risk Triggers
Risk vs Issue
Risk vs Opportunity
Risk vs Uncertainty
Risk-Reward Ratio
Seasonal Risk
Secondary Risk
Security Risk
Settlement Risk
Risk Sharing
Speculative Risk
Strategic Risk
Strategy Risk
Supply Risk
Systemic Risk
Tactical Risk
Taxation Risk
Technology Risk
Risk Transfer
Unforced Error
Upside Risk
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