What is the differences between subjective risk and objective risk?

Subjective risk refers to an individual's personal perception or belief about the likelihood of a particular event occurring, influenced by personal experiences, emotions, and biases. In contrast, objective risk is based on measurable, statistical data and facts, representing the actual probability of an event happening. While subjective risk can vary greatly among individuals, objective risk remains consistent regardless of personal opinion. Understanding both types of risk is important for decision-making in areas like finance and insurance.