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Risk is a state of uncertainty, where some possible outcomes have an undesired effect or significant loss. Measurement of risk includes a set of measured uncertainties, where some possible outcomes are losses, and the magnitudes of those losses.
In economics, Knightian uncertainty is a lack of any quantifiable knowledge about some possible occurrence, as opposed to the presence of quantifiable risk (e.g., that in statistical noise or a parameter's confidence interval). The concept acknowledges some fundamental degree of ignorance, a limit to knowledge, and an essential unpredictability ...
Firefighters are exposed to risks of fire and building collapse during their work.. In simple terms, risk is the possibility of something bad happening. [1] Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences. [2]
The average value at risk (sometimes called expected shortfall or conditional value-at-risk or ) is a coherent risk measure, even though it is derived from Value at Risk which is not. The domain can be extended for more general Orlitz Hearts from the more typical Lp spaces .
As applied to finance, risk management concerns the techniques and practices for measuring, monitoring and controlling the market-and credit risk (and operational risk) on a firm's balance sheet, due to a bank's credit and trading exposure, or re a fund manager's portfolio value; for an overview see Finance § Risk management. A traditional ...
The exposure of financial instruments to valuation risk is lowest for Level 1 instruments (whose value can be easily determined based upon prices from actual trades in a liquid market, i.e. entirely observable inputs) and increases as a direct function of the significance of unobservable inputs used in the valuation, reaching a maximum with ...
An erosion gully in Australia caused by rabbits, an unintended consequence of their introduction as game animals. In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences, more colloquially called knock-on effects) are outcomes of a purposeful action that are not intended or foreseen.
Easily interpreted: The result of the calculation is a single number, with a higher score usually means higher risk. Furthermore, many scoring methods enforce some form of monotonicity along the measured risk factors to allow a straightforward interpretation of the score (e.g. risk of mortality only increases with age, risk of payment default ...