What term describes the probability of a negative event occurring?

The concept that describes the probability of a negative event occurring is best understood through the term "calculated risk." This term refers to the process of evaluating potential negative outcomes when making decisions, especially in business contexts. It involves analyzing the likelihood of these negative events and weighing the risks against the potential rewards.

In business, understanding calculated risks allows entrepreneurs and managers to take informed steps that involve a degree of uncertainty while still striving for desired outcomes. By assessing various risks, businesses can develop strategies that mitigate these negative probabilities.

The other terms provided do not accurately describe the probability of negative events. For example, risk assessment is a broader strategy that helps identify and evaluate risks, but it does not specifically focus on the probability of negative outcomes. Failure probability might imply the chance of failure, but it is less commonly used in this specific context. Opportunity cost refers to the potential benefits one misses out on when choosing one alternative over another, which does not relate to the probability of negative events.