Declaring variables inside or outside of a loop

Question

Why does the following work fine?

String str;
while (condition) {
    str = calculateStr();
    .....
}

But this one is said to be dangerou

Answer 1

Declaring String str outside of the while loop allows it to be referenced inside & outside the while loop. Declaring String str inside of the while loop allows it to only be referenced inside that while loop.