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started by AB Associates Detective on 16 Jun 15
  • AB Associates Detective
     

    The process of analysis,
    identification and mitigation of uncertainty in investment decision-making. The Economical application of resources
    to minimize, monitor, and control the probability and/or impact of unfortunate
    events. The Risk Management occurs anytime an investor or fund attempts to quantify the potential for
    losses in an investment and then takes the appropriate action.



    Once risks have been identified, they must then
    be assessed as to their potential severity of impact and to the probability of
    occurrence. These quantities can be either simple to measure, in the case of
    the value of a lost building, or impossible to know for sure in the case of the
    probability of an unlikely event occurring. Therefore, in the assessment
    process it is critical to make the best educated decisions in order to properly
    prioritize the implementation of the risk management plan.



    The main difficulty in risk assessment is
    determining the rate of occurrence since statistical information is not
    available on all kinds of past incidents. Furthermore, evaluating the severity
    of the consequences is often quite difficult for intangible assets. Asset
    valuation is another question that needs to be addressed. Thus, Perfect
    decisions and available statistics are the primary sources of information.



    Risk assessment should produce such information
    for the management of the organization that the primary risks are easy to
    understand and that the risk management decisions may be prioritized. Thus,
    there have been several theories and attempts to quantify risks.


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