Information AboutRisk |
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Risk is the potential Harm that may arise from some present Process or from some future Event . In everyday usage, "risk" is often used synonymously with "probability", but in professional risk assessments, risk combines the probability of a negative event occurring with how harmful that event would be. Financial Risk is often defined as the unexpected variability or Volatility of returns, and thus includes both potential worse than expected as well as better than expected returns. DEFINED ASPECTS OF RISK The engineering definition of risk: : Risk is often mapped to the Probability of some event which is seen as undesirable. Usually the probability of that event and some assessment of its expected harm must be combined into a believable Scenario (an outcome) which combines the set of Risk, Regret And Reward probabilities into an Expected Value for that outcome. (See also Expected Utility ) -Could be used in the sentence: "It was definitely a risk walking through that neighborhood at night wearing a Klu Klux Klan costume" Thus in Statistical Decision Theory , the Risk Function of an Estimator ''δ(x)'' for a Parameter θ, calculated from some Observable s ''x''; is defined as the expectation value of the Loss Function ''L'', |
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