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CMA Final · Entrepreneurship and Startup · Entrepreneurial Skill Sets

Kavya, a Hyderabad-based founder of a cold-chain logistics startup, invested her savings after calculating that the market gap was large, but she also arranged a backup cold-storage vendor and limited her first-year spending to a fixed budget. Which entrepreneurial trait is most clearly shown by her approach to risk?

Her approach shows calculated risk-taking. She accepted uncertainty only after assessing the market gap, and she managed exposure with a spending cap and a backup vendor. This differs from gambling, which relies on chance, and from risk aversion, which avoids the venture entirely.

  1. ARisk aversion, because she avoids any venture where losses are possible
  2. BCalculated risk-taking, because she accepts uncertainty after assessing it and puts limits and contingencies in placeCorrect
  3. CRisk indifference, because she ignores the probability of failure and relies on persistence
  4. DGambling propensity, because she depends on chance outcomes rather than analysis

Explanation

Entrepreneurs typically take moderate, calculated risks. Kavya assessed the market gap, set a spending cap and arranged a backup vendor, which shows analysis plus mitigation. Gambling or indifference would involve ignoring or not managing the risk, and risk aversion would mean avoiding the venture altogether.

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