What Does Calculated Risk Mean?

Calculated Risk Meaning

Definition: A chance that is taken after a careful estimation of the possible outcomes.

People use this expression when the possible gain is worth more than what will be lost if the action fails.

Origin of Calculated Risk

This expression dates back to World War II. Military leaders would estimate the chance that a military action would have of failure. Then, they would weigh it against the possible rewards if the mission were successful.

In this expression, the word calculated means planned.

Examples of Calculated Risk

what is calculated risk takingHere is an example of a math professor and her student using the expression. The student pulled a fire alarm in order to avoid taking a math test.

Student: Hey! I just wanted to apologize for pulling that fire alarm.

Teacher: Why would you do something like that? The firefighters had to come all the way to the school, and there was no emergency. Imagine if there was an actual fire somewhere else. Someone might have died in a real fire because all the firefighters were here for no good reason!

Student: I’m sorry. I didn’t think about that. I just really didn’t want to take the math test. I knew that if I pulled the fire alarm everyone would have to leave the school.

Teacher: Didn’t you realize that you might get caught? The police are going to charge you with a crime. 

Student: I knew I might get caught, but I took a calculated risk. I figured the chance of getting caught was small, and the reward of not taking the test was too big to pass.

Teacher: Well, it was a horrible decision.

define calculated riskIn this example, two friends are discussing whether or not they should confront a third friend who has been stealing from them.

Monica: I think we need to tell Julie that we know she is stealing from us.

Janice: But we don’t have any proof. She’ll just get angry.

Monica: So what?

Janice: She’ll tell all our other friends that we are spreading lies about her.

Monica: That’s a risk we’ll have to take. I can’t keep letting her steal from us.

Janice: I guess you’re right. It’s a calculated risk. I think we should confront her, too.

More Examples

This excerpt is about a person who could have been the new prime minister of Britain.

  • It would be a meteoric rise for a politician who took a calculated risk by joining the Leave campaign. And it could yet lead to his undoing. –LA Times

The second example is about an athlete trying to fix an injury.

  • Undergoing stem cell treatment might allow him to return to the Angels’ rotation by the end of this season, Heaney was told. So he took a calculated risk and visited the Kerlan-Jobe Orthopaedic Clinic, where stem cells from his own bone marrow were injected  into his left elbow. LA Times

Summary

The term calculated risk describes an action that someone takes that might not succeed but is worth taking the chance.

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