Via my Facebook account from a former student doing a stint in the Peace Corps:

how can one measure risk? for example - the risk of selling a perishable good vs. a non-perishable....would it have anything to do with possible future gains or is it only future losses???? If you can spare the time for a short explanation - please bestow upon me your infinite knowledge oh great one....ok sorry, i watched Willow yesterday.

My reply:

To answer your question, risk involves gains and losses. Risk is defined as probability times financial gain/loss so a measure of risk is the joint distribution of probabilities over the gains and losses.

If you could estimate the probabilities of certain events happening then that would be an OK measure of risk.

Did I get that correct?