risksdangerrisk-takingsecurity riskdangerousdangerousnessbusiness riskpreventionpreventive measurerisk taking
Risk is the possibility of losing something of value.wikipedia
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perceived riskperception of riskperceptions of risk
Risk perception is the subjective judgment people make about the severity and probability of a risk, and may vary person to person.
Risk perception is the subjective judgement that people make about the characteristics and severity of a risk.
risk factorsdeterminantsacute health hazard
Ethical medical practice requires careful discussion of risk factors with individual patients to obtain informed consent for secondary and tertiary prevention efforts, whereas public health efforts in primary prevention require education of the entire population at risk.
In epidemiology, a risk factor is a variable associated with an increased risk of disease or infection.
Information technology riskriskStandards Organizations and Standards
The increasing dependencies of modern society on information and computers networks (both in private and public sectors, including military) has led to new terms like IT risk and Cyberwarfare.
Information technology risk, IT risk, IT-related risk, or cyber risk is any risk related to information technology.
Risk can also be defined as the intentional interaction with uncertainty.
Risk: A state of uncertainty where some possible outcomes have an undesired effect or significant loss.
demoralizing effectbreakdown in accountabilityincentive for responsibility
For instance, an extremely disturbing event (an attack by hijacking, or moral hazards) may be ignored in analysis despite the fact it has occurred and has a nonzero probability.
In economics, moral hazard occurs when someone increases their exposure to risk when insured, especially when a person takes more risks because someone else bears the cost of those risks.
as low as reasonably practicableAs Low As Reasonably Achievable(ALARA)
A higher level of risk (typically up to 10 to 100 times what is considered broadly acceptable) has to be justified against the costs of reducing it further and the possible benefits that make it tolerable—these risks are described as "Tolerable if ALARP", where ALARP stands for "as low as reasonably practicable".
For a risk to be ALARP, it must be possible to demonstrate that the cost involved in reducing the risk further would be grossly disproportionate to the benefit gained.
It is not always obvious if financial instruments are "hedging" (purchasing/selling a financial instrument specifically to reduce or cancel out the risk in another investment) or "speculation" (increasing measurable risk and exposing the investor to catastrophic loss in pursuit of very high windfalls that increase expected value).
So there is a risk of a future event that affects stock prices across the whole industry, including the stock of Company A along with all other companies.
risk seekingrisk-lovingrisk loving
Some people may be "risk seeking", i.e. their utility function's second derivative is positive.
In economics and finance, a risk-seeker or risk-lover is a person who has a preference for risk.
On the other hand, risk assessment methodologies like Mehari evolved to become security assessment methodologies.
MEHARI (MEthod for Harmonized Analysis of RIsk) is a free, open-source information risk analysis assessment and risk management method, for the use of information security professionals.
The International Organization for Standardization publication ISO 31000 (2009) / ISO Guide 73:2002 definition of risk is the 'effect of uncertainty on objectives'.
In the workplace, incidental and inherent risks exist.
Inherent risk, in Risk management, is an assessed level of raw or untreated risk; that is, the natural level of risk inherent in a process or activity without doing anything to reduce the likelihood or mitigate the severity of a mishap, or the amount of risk before the application of the risk reduction effects of controls.
This gave rise to prospect theory and cumulative prospect theory.
Prospect theory is a theory in cognitive psychology that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are uncertain.
systems engineersystemssystem engineering
Information assurance is interdisciplinary and draws from multiple fields, including accounting, fraud examination, forensic science, management science, systems engineering, security engineering, and criminology, in addition to computer science.
Risk Management, the practice of assessing and dealing with risk is one of the interdisciplinary parts of Systems Engineering. In development, acquisition, or operational activities, the inclusion of risk in tradeoff with cost, schedule, and performance features, involves the iterative complex configuration management of traceability and evaluation to the scheduling and requirements management across domains and for the system lifecycle that requires the interdisciplinary technical approach of systems engineering. Systems Engineering has Risk Management define, tailor, implement, and monitor a structured process for risk management which is integrated to the overall effort.
standard deviationssample standard deviationsigma
Some regard the standard deviation of the historical returns or average returns of a specific investment as providing some historical measure of risk; see modern portfolio theory.
In finance, standard deviation is often used as a measure of the risk associated with price-fluctuations of a given asset (stocks, bonds, property, etc.), or the risk of a portfolio of assets (actively managed mutual funds, index mutual funds, or ETFs).
In a view advocated by Damodaran, risk includes not only "downside risk" but also "upside risk" (returns that exceed expectations).
The CAPM, however, includes both halves of a distribution in its calculation of risk.
TverskyTversky, AmosA. Tversky
Amos Nathan Tversky (עמוס טברסקי; March 16, 1937 – June 2, 1996) was a cognitive and mathematical psychologist, a student of cognitive science, a collaborator of Daniel Kahneman, and a figure in the discovery of systematic human cognitive bias and handling of risk.
uncertaintyFrank Knightfundamental uncertainty
Thus, Knightian uncertainty is immeasurable, not possible to calculate, while in the Knightian sense risk is measurable.
Knightian uncertainty is named after University of Chicago economist Frank Knight (1885–1972), who distinguished risk and uncertainty in his work Risk, Uncertainty, and Profit:
It serves both as a comprehensive introduction to the formulation and implementation at the strategic level of policies that address risk, and as an advancement in the integration of current practices, including emergency management, environmental management, community development and spatial planning.
Early Case Assessment (ECA)
Early case assessment
Early case assessment refers to estimating risk (cost of time and money) to prosecute or defend a legal case.
The level of risk deemed broadly acceptable has been considered by regulatory bodies in various countries—an early attempt by UK government regulator and academic F. R. Farmer used the example of hill-walking and similar activities, which have definable risks that people appear to find acceptable.
He considered the public acceptability of risk, (e.g. from nuclear reactors), arguing that a whole spectrum of events needs to be considered - not just the Maximum Credible Accident, but also those of less consequence but which were much more probable.
The likely severity of the undesirable consequences of an incident associated with a hazard, combined with the probability of this occurring, constitute the associated risk.
risk analysisriskrisk communication
Risk management is the identification, evaluation, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.
Reliability engineering deals with the estimation, prevention and management of high levels of "lifetime" engineering uncertainty and risks of failure.
International Risk Governance Council
IRGC’s activities include developing concepts of risk governance, improving the understanding of major emerging risk issues, and providing risk governance policy recommendations for stakeholders and decision-makers.
Dr. Diane Vaughannormalization of deviance
In the understanding of safety and risk, Vaughan is perhaps best known for coining the phrase “normalization of deviance”, which she has used to explain the sociological causes of the Challenger and Columbia disasters.