Classification of risk:

1) Risk Averse: Who is reluctant to accept a bargain with an uncertain payoff rather than

another bargain with more certain payoff, but possibly lower expected payoff.

2) Risk Neutral: Who is indifferent between certain and risky outcome.

3) Risk Seeking: Who prefers taking risk with the expectation of greater outcome.

Major sources of risk

Drought, floods, insect-pests, frost, hails, cattle epidemic, sudden fall in product prices, break down of machinery, defective seeds, delay in the transport of perishable commodities, theft, robbery, fire, labor strike, etc.