Final answer:
ABC Burgers is riskier than CDF Candy because it has a 100% chance of fire-related loss compared to a 5% chance for CDF Candy, indicating a much higher level of risk.
Step-by-step explanation:
The question asks to identify which of the two businesses, ABC Burgers or CDF Candy, is considered riskier based on the given probabilities of fire-related loss. The definition of "risk," as commonly used in this context, pertains to the likelihood and severity of a potential loss. In this case, ABC Burgers has a 100% chance of experiencing a loss, while CDF Candy has a 5% chance.
As per the information, ABC Burgers would be considered riskier because there is a certainty (100% chance) of a fire-related loss, indicating a high level of risk. On the other hand, CDF Candy has a relatively lower probability of loss (5% chance), signifying a lower level of risk. Therefore, given that risk is generally assessed based on the probability of an event occurring, ABC Burgers is undeniably the riskier of the two.
The formula for calculating relative risk includes finding the incidence (probability) of an event occurring in one group versus another. However, since ABC Burgers has a 100% probability, its relative risk would be substantially higher than that of CDF Candy, making option a) ABC Burgers the correct answer. The relative risk is not quantitatively calculated in this response because the given probabilities are enough to determine that ABC Burgers is riskier.