Which definition of risk refers to the likelihood of a negative outcome?

The definition of risk that refers to the likelihood of a negative outcome is accurately described as the probability of loss. This definition focuses on the quantifiable aspect of risk, which assesses how likely it is for an adverse event to occur. In risk management, understanding the probability of loss is essential for identifying potential threats and for making informed decisions about how to minimize those risks.

While variability of outcomes refers to the range of possible results that can occur, it does not specifically address the likelihood of negative outcomes. Uncertainty relates to the unknown factors surrounding potential events and outcomes, but it lacks the specificity regarding negative outcomes found in the probability of loss. Assessment of loss typically implies an evaluation process after a loss has occurred rather than focusing on the likelihood of such loss taking place beforehand. Thus, the term that best encapsulates the idea of the likelihood of a negative outcome in risk management is indeed the probability of loss.