Risk is a concept that denotes a potential negative impact to some characteristic of value that may arise from a future event, or we can say that "Risks are events or conditions that may occur, and whose occurrence, if it does take place, has a harmful or negative effect". The economic value of a good or service has puzzled economists since the beginning of the discipline In Probability theory, an event is a set of outcomes (a Subset of the Sample space) to which a probability is assigned Exposure to the consequences of uncertainty constitutes a risk. In everyday usage, risk is often used synonymously with the probability of a known loss.

Risk communication and risk perception are essential factors for all human decision making. For non-business risks see Risk or the disambiguation page Risk analysis. Risk perception is the subjective judgment that people make about the characteristics and severity of a Risk. Decision making can be regarded as an outcome of mental processes ( cognitive process) leading to the selection of a course of action among several alternatives

Contents 1 Definitions of risk 1.1 Historical background 1.2 Risk vs. uncertainty 2 Insurance and health risk 3 Economic risk 3.1 Insight 3.2 In business 3.3 Criticism 3.4 Risk-sensitive industries 3.4.1 In finance 3.5 In public works 4 Risk in psychology 4.1 Regret 4.2 Framing 4.3 Fear as intuitive risk assessment 5 Root causes of risk 6 Risk assessment and management 7 Risk in auditing 8 Categories of risks 9 See also 10 References 10.1 Articles & Papers 10.2 Books 10.3 Magazines and Journals 10.4 Societies 11 External links

Definitions of risk

There are many definitions of risk that vary by specific application and situational context. Risk is described both qualitatively and quantitatively.

Qualitatively, risk is proportional to both the expected losses which may be caused by an event and to the probability of this event. Greater loss and greater event likelihood result in a greater overall risk.

Frequently in the subject matter literature, risk is defined in pseudo-formal forms where the components of the definition are vague and ill-defined, for example, risk is considered as an indicator of threat, or depends on threats, vulnerability, impact and uncertainty. For other uses of the word "Vulnerability" please refer to Vulnerability (computing You may also want to refer to Natural disaster. Uncertainty is a term used in subtly different ways in a number of fields including Philosophy, Statistics, Economics, Finance, Insurance

In engineering, the definition of risk is:

Measuring engineering risk is often difficult, especially in potentially dangerous industries such as nuclear energy. Engineering is the Discipline and Profession of applying technical and scientific Knowledge and Often, the probability of a negative event is estimated by using the frequency of past similar events or by event-tree methods, but probabilities for rare failures may be difficult to estimate if an event tree cannot be formulated. Probability is the likelihood or chance that something is the case or will happen Probability is the likelihood or chance that something is the case or will happen Methods to calculate the cost of the loss of human life vary depending on the purpose of the calculation. Specific methods include what people are willing to pay to insure against death^[1], and radiological release (e. g. , GBq of radio-iodine). There are many formal methods used to assess or to "measure" risk, considered as one of the critical indicators important for human decision making. Decision making can be regarded as an outcome of mental processes ( cognitive process) leading to the selection of a course of action among several alternatives

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. Financial risk is normally any Risk associated with any form of financing. Volatility most frequently refers to the Standard deviation of the continuously compounded returns of a Financial instrument with a specific time horizon References to negative risk below should be read as applying to positive impacts or opportunity (e. g. , for "loss" read "loss or gain") unless the context precludes.

In statistics, risk is often mapped to the probability of some event which is seen as undesirable. Probability is the likelihood or chance that something is the case or will happen 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. A scenario (from Italian, that which is pinned to the scenery) is a synthetic description of an event or series of actions and events (See also Expected utility. In Economics, Game theory, and Decision theory the expected utility theorem or expected utility hypothesis predicts that the "betting preferences" )

Thus, in statistical decision theory, the risk function of an estimator δ(x) for a parameter θ, calculated from some observables x, is defined as the expectation value of the loss function L,

In information security, a risk is defined as a function of three variables:

1. the probability that there is a threat
2. the probability that there are any vulnerabilities
3. the potential impact. Decision theory in Mathematics and Statistics is concerned with identifying the Values uncertainties and other issues relevant in a given This article is about the mathematical definition of risk in statistical decision theory In Statistics, an estimator is a function of the observable sample data that is used to estimate an unknown population Parameter (which is called the In Mathematics, Statistics, and the mathematical Sciences a parameter ( G auxiliary measure) is a quantity that defines certain characteristics In Physics, particularly in Quantum physics, a system observable is a property of the system state that can be determined by some sequence of physical In Statistics, Decision theory and Economics, a loss function is a function that maps an event (technically an element of a Sample space Information security means protecting information and information systems from unauthorized access use disclosure disruption modification or destruction For other uses of the word "Vulnerability" please refer to Vulnerability (computing You may also want to refer to Natural disaster.

If any of these variables approaches zero, the overall risk approaches zero.

The management of actuarial risk is called risk management. For non-business risks see Risk or the disambiguation page Risk analysis.

Historical background

Scenario analysis matured during Cold War confrontations between major powers, notably the U.S. and the USSR. Scenario analysis is a process of analyzing possible future events by considering alternative possible outcomes (scenarios Cold War is the state of conflict tension and competition that existed between the United States and the Soviet Union (USSR and their respective allies from the The United States of America —commonly referred to as the The Union of Soviet Socialist Republics (USSR was a constitutionally Socialist state that existed in Eurasia from 1922 to 1991 It became widespread in insurance circles in the 1970s when major oil tanker disasters forced a more comprehensive foresight. For the fictional character see Oil Slick (Transformers. An oil spill is the release of a Liquid Petroleum Hydrocarbon into The scientific approach to risk entered finance in the 1980s when financial derivatives proliferated. Derivatives are Financial instruments whose values depend on the value of other underlying financial instruments It reached general professions in the 1990s when the power of personal computing allowed for widespread data collection and numbers crunching.

Governments are apparently only now learning to use sophisticated risk methods, most obviously to set standards for environmental regulation, e. Environmental law is a complex and interlocking body of Statutes, Common law, Treaties, conventions Regulations and policies which very g. "pathway analysis" as practiced by the United States Environmental Protection Agency.

Risk vs. uncertainty

In his seminal work Risk, Uncertainty, and Profit, Frank Knight (1921) established the distinction between risk and uncertainty. Frank Hyneman Knight ( November 7, 1885 - April 15, 1972) was an important Economist of the twentieth century Uncertainty is a term used in subtly different ways in a number of fields including Philosophy, Statistics, Economics, Finance, Insurance

“

. . . Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated. The term "risk," as loosely used in everyday speech and in economic discussion, really covers two things which, functionally at least, in their causal relations to the phenomena of economic organization, are categorically different. . . . The essential fact is that "risk" means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomenon depending on which of the two is really present and operating. . . . It will appear that a measurable uncertainty, or "risk" proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all. We . . . accordingly restrict the term "uncertainty" to cases of the non-quantitive type.

”

A solution to this ambiguity is proposed in "How to Measure Anything:Finding the Value of Intangibles in Business" by Doug Hubbard^[2]

Uncertainty: The lack of complete certainty, that is, the existence of more than one possibility. The "true" outcome/state/result/value is not known.

Measurement of Uncertainty: A set of probabilities assigned to a set of possibilities. Example: "There is a 60% chance this market will double in five years"

Risk: A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome

Measurement of Risk: A set of possibilities each with quantified probabilities and quantified losses. Example: "There is a 40% chance the proposed oil well will be dry with a loss of $12 million in exploratory drilling costs".

In this sense, Hubbard uses the terms so that one may have uncertainty without risk but not risk without uncertainty. We can be uncertain about the winner of a contest, but unless we have some personal stake in it, we have no risk. If we bet money on the outcome of the contest, then we have a risk. In both cases there are more than one outcome. The measure of uncertainty refers only to the probabilities assigned to outcomes, while the measure of risk requires both probabilities for outcomes and losses quantified for outcomes.

Insurance and health risk

Insurance is a risk-reducing investment in which the buyer pays a small fixed amount to be protected from a potential large loss. Insurance, in Law and Economics, is a form of Risk management primarily used to hedge against the Risk of a contingent loss Investment or investing is a term with several closely-related meanings in Business management, Finance and Economics, related to saving Gambling is a risk-increasing investment, wherein money on hand is risked for a possible large return, but with the possibility of losing it all. Purchasing a lottery ticket is a very risky investment with a high chance of no return and a small chance of a very high return. In contrast, putting money in a bank at a defined rate of interest is a risk-averse action that gives a guaranteed return of a small gain and precludes other investments with possibly higher gain.

Risks in personal health may be reduced by primary prevention actions that decrease early causes of illness or by secondary prevention actions after a person has clearly measured clinical signs or symptoms recognized as risk factors. In Medicine, prevention is any activity which reduces the burden of mortality or morbidity from Disease. In Medicine, prevention is any activity which reduces the burden of mortality or morbidity from Disease. Tertiary prevention (medical) reduces the negative impact of an already established disease by restoring function and reducing disease-related complications. In Medicine, prevention is any activity which reduces the burden of mortality or morbidity from Disease. 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. A Risk factor is a concept in Finance theory such as the CAPM, APT and other theories that use pricing kernels Informed consent is a legal condition whereby a person can be said to have given Consent based upon an appreciation and understanding of the facts implications In each case, careful communication about risk factors, likely outcomes and certainty must distinguish between causal events that must be decreased and associated events that may be merely consequences rather than causes. A related article is titled Uncertainty. For statistical certainty see Probability.

Economic risk

Insight

The central insight in the methodology for incorporating economic risks arise from the realization of the fact that however manifold and diverse might be the causes, or factors, of risks around a specific project or business (for instance, the hike in the price for raw materials, the lapsing of deadlines for construction of a new operating facility, disruptions in a production process, emergence of a serious competitor on the market, the loss of key personnel, the change of a political regime, natural contingencies, etc. ), all of these are ultimately manifested under only two guises. According to CCF Conception the economic risk consists in that: Actual positive conventional cash flows (income, inflows) turn out to be less than expected AND / OR Actual negative conventional cash flows (expenditures, outflows) turn out to be larger than expected (in absolute terms).

Such lucid and unambiguous conceptual treatment of such a complex and multi-faceted notion as the economic risk emphasizes the very core of the question. The economic risk is not an abstract ‘uncertainty’ or ‘possibility of failure’ or changeableness (variability) of the outcome… The economic risk – is a monetary amount which might be under-collected and/or over-paid. Just as in music, one must use musical notes and staves—not alphabet letters or colors—to render a melody, in describing economic risk, we must ultimately operate with monetary units and not with the percentages of discount rates, magnitudes of volatility or anything else. (See [1]. )

In business

Means of assessing risk vary widely between professions. Indeed, they may define these professions; for example, a doctor manages medical risk, while a civil engineer manages risk of structural failure. A professional code of ethics is usually focused on risk assessment and mitigation (by the professional on behalf of client, public, society or life in general). This article is about people called professionals For the Movie, see The Professional or Leon.

In the workplace, incidental and inherent risks exist. Incidental risks are those which occur naturally in the business but are not part of the core of the business. Inherent risks have a negative effect on the operating profit of the business.

Criticism

Criticism has been leveled at the amoral ("rational") application of quantitative risk assessment.

Risk-sensitive industries

Some industries manage risk in a highly quantified and numerate way. These include the nuclear power and aircraft industries, where the possible failure of a complex series of engineered systems could result in highly undesirable outcomes. Nuclear power is any Nuclear technology designed to extract usable Energy from atomic nuclei via controlled Nuclear reactions An aerospace manufacturer is a company or individual involved in the various aspects of designing building testing selling and maintaining Aircraft, Aircraft parts The usual measure of risk for a class of events is then, where P is probability and C is consequence:

The total risk is then the sum of the individual class-risks.

In the nuclear industry, consequence is often measured in terms of off-site radiological release, and this is often banded into five or six decade-wide bands.

• Operational risk
• Safety engineering

The risks are evaluated using fault tree/event tree techniques (see safety engineering). An operational risk is a risk arising from execution of a company's business functions Safety engineering is an applied science strongly related to Systems engineering and the subset System Safety Engineering Safety engineering is an applied science strongly related to Systems engineering and the subset System Safety Engineering Where these risks are low, they are normally considered to be "Broadly Acceptable". 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". ALARP stands for " as low as reasonably practicable " and is a term often used in the milieu of Safety-critical and High-integrity systems The Risks beyond this level are classified as "Intolerable".

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. F Reg Farmer OBE, FRS, (1914-2001 was a nuclear regulator (working for the United Kingdom Atomic Energy Authority 's Safety and Reliability Directorate This resulted in the so-called Farmer Curve of acceptable probability of an event versus its consequence.

The technique as a whole is usually referred to as Probabilistic Risk Assessment (PRA) (or Probabilistic Safety Assessment, PSA). See WASH-1400 for an example of this approach.

In finance

Main article: Financial risk

In finance, risk is the probability that an investment's actual return will be different than expected. Financial risk is normally any Risk associated with any form of financing. This includes the possibility of losing some or all of the original investment. It is usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment.

In finance, risk has no one definition, but some theorists, notably Ron Dembo, have defined quite general methods to assess risk as an expected after-the-fact level of regret. The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated Ron S Dembo is a financial engineer and business entrepreneur Such methods have been uniquely successful in limiting interest rate risk in financial markets. In Finance, rate risk is the risk of losses caused by Interest rate changes In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds Financial markets are considered to be a proving ground for general methods of risk assessment.

However, these methods are also hard to understand. The mathematical difficulties interfere with other social goods such as disclosure, valuation and transparency. In particular, it is often difficult to tell if such financial instruments are "hedging" (purchasing/selling a financial instrument specifically to reduce or cancel out the risk in another investment) or "gambling" (increasing measurable risk and exposing the investor to catastrophic loss in pursuit of very high windfalls that increase expected value). Financial instruments are cash evidence of an ownership interest in an entity or a contractual right to receive or deliver cash or another financial instrument In Finance, a hedge is an investment that is taken out specifically to reduce or cancel out the Risk in another investment

As regret measures rarely reflect actual human risk-aversion, it is difficult to determine if the outcomes of such transactions will be satisfactory. Risk seeking describes an individual whose utility function's second derivative is positive. Such an individual would willingly (actually pay a premium to) assume all risk in the economy and is hence not likely to exist.

In financial markets, one may need to measure credit risk, information timing and source risk, probability model risk, and legal risk if there are regulatory or civil actions taken as a result of some "investor's regret". Credit risk is the risk of loss due to a debtor's non-payment of a Loan or other line of credit (either the principal or Interest (coupon or both Faced Legal and regulatory risk: Sometimes governments change the law in a way that adversely affects a bank's position Regret (often also called opportunity loss) is defined as the difference between one's actual payoff and the payoff in a better position that he could have got if a different

"A fundamental idea in finance is the relationship between risk and return. The greater the amount of risk that an investor is willing to take on, the greater the potential return. The reason for this is that investors need to be compensated for taking on additional risk. "

"For example, a US Treasury bond is considered to be one of the safest investments and, when compared to a corporate bond, provides a lower rate of return. The reason for this is that a corporation is much more likely to go bankrupt than the U. S. government. Because the risk of investing in a corporate bond is higher, investors are offered a higher rate of return. "

In public works

In a peer reviewed study of risk in public works projects located in twenty nations on five continents, Flyvbjerg, Holm, and Buhl (2002, 2005) documented high risks for such ventures for both costs [2] and demand [3]. Actual costs of projects were typically higher than estimated costs; cost overruns of 50% were common, overruns above 100% not uncommon. Cost overrun is defined as excess of actual Cost over Budget. Actual demand was often lower than estimated; demand shortfalls of 25% were common, of 50% not uncommon. Supply and demand is an Economic model describing effects on price and quantity in a Market. A benefit shortfall results from the actual benefits of a venture being lower than the projected or estimated benefits of that venture

Due to such cost and demand risks, cost-benefit analyses of public works projects have proved to be highly uncertain. Cost-benefit analysis is a term that refers both to a formal discipline used to help appraise or assess the case for a Project or proposal which itself is

The main causes of cost and demand risks were found to be optimism bias and strategic misrepresentation. Optimism bias is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions Strategic misrepresentation is the planned systematic distortion or misstatement of fact—lying—in response to incentives in the Budget process Measures identified to mitigate this type of risk are better governance through incentive alignment and the use of reference class forecasting [4]. Governance relates to decisions that define expectations, grant power, or verify performance. Reference class Forecasting predicts the outcome of a planned action based on actual outcomes in a reference class of similar actions to that being forecast

Risk in psychology

Main articles: Decision theory and Prospect theory

Regret

In decision theory, regret (and anticipation of regret) can play a significant part in decision-making, distinct from risk aversion (preferring the status quo in case one becomes worse off). Decision theory in Mathematics and Statistics is concerned with identifying the Values uncertainties and other issues relevant in a given Prospect theory is a theory that describes decisions between alternatives that involve Risk, i Decision theory in Mathematics and Statistics is concerned with identifying the Values uncertainties and other issues relevant in a given Risk aversion is a concept in Economics, Finance, and Psychology related to the behaviour of consumers and investors under uncertainty

Framing

Framing(Tversky, Amos, and Daniel Kahneman, 1981. "The Framing of Decisions and the Psychology of Choice. ") is a fundamental problem with all forms of risk assessment. In particular, because of bounded rationality (our brains get overloaded, so we take mental shortcuts), the risk of extreme events is discounted because the probability is too low to evaluate intuitively. Some models of Human behavior in the Social sciences assume that Humans can be reasonably approximated or described as " rational " entities (see As an example, one of the leading causes of death is road accidents caused by drunk driving—partly because any given driver frames the problem by largely or totally ignoring the risk of a serious or fatal accident. Driving under the influence of alcohol ( driving while intoxicated, drunk driving, drinking and driving, drink-driving) or other drugs

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. Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk Or, an event that everyone agrees is inevitable may be ruled out of analysis due to greed or an unwillingness to admit that it is believed to be inevitable. These human tendencies to error and wishful thinking often affect even the most rigorous applications of the scientific method and are a major concern of the philosophy of science. Wishful thinking is the formation of Beliefs and making decisions according to what might be pleasing to imagine instead of by appealing to Evidence or Scientific method refers to bodies of Techniques for investigating phenomena Philosophy of science is the study of assumptions foundations and implications of Science.

All decision-making under uncertainty must consider cognitive bias, cultural bias, and notational bias: No group of people assessing risk is immune to "groupthink": acceptance of obviously wrong answers simply because it is socially painful to disagree, where there is conflicts of interest. Decision theory in Mathematics and Statistics is concerned with identifying the Values uncertainties and other issues relevant in a given For an article about the conceptual problems of the mind see Cognitive closure (philosophy. Cultural bias is when someone is biased due to his or her culture Notational bias is a form of Cultural bias that is incurred when the available Notation to describe something introduces a bias in the Human ability to Groupthink is a type of thought exhibited by group members who try to minimize conflict and reach consensus without critically testing analyzing and evaluating ideas A conflict of interest is a situation in which someone in a position of trust such as a Lawyer, Insurance adjuster, a Politician, executive or director One effective way to solve framing problems in risk assessment or measurement (although some argue that risk cannot be measured, only assessed) is to raise others' fears or personal ideals by way of completeness.

Fear as intuitive risk assessment

For the time being, people rely on their fear and hesitation to keep them out of the most profoundly unknown circumstances.

In The Gift of Fear, Gavin de Becker argues that "True fear is a gift. The Gift of Fear is a Nonfiction Self help book (1997 written by Gavin de Becker. Gavin de Becker (born October 26 1954) is a specialist in security issues primarily for governments large corporations and celebrities It is a survival signal that sounds only in the presence of danger. Yet unwarranted fear has assumed a power over us that it holds over no other creature on Earth. It need not be this way. "

Risk could be said to be the way we collectively measure and share this "true fear"—a fusion of rational doubt, irrational fear, and a set of unquantified biases from our own experience.

The field of behavioral finance focuses on human risk-aversion, asymmetric regret, and other ways that human financial behavior varies from what analysts call "rational". Behavioral economics and behavioral finance are closely related fields which apply scientific research on human and social cognitive and emotional factors to better Risk in that case is the degree of uncertainty associated with a return on an asset. Uncertainty is a term used in subtly different ways in a number of fields including Philosophy, Statistics, Economics, Finance, Insurance Returns, in economics and political economy are the distributions or payments awarded to the various suppliers of the Factors of production. In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash.

Recognizing and respecting the irrational influences on human decision making may do much to reduce disasters caused by naive risk assessments that pretend to rationality but in fact merely fuse many shared biases together.

Root causes of risk

Optimism bias and strategic misrepresentation have been found to be root causes of risk. Optimism bias is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions Strategic misrepresentation is the planned systematic distortion or misstatement of fact—lying—in response to incentives in the Budget process

Risk assessment and management

Because planned actions are subject to large cost and benefit risks, proper risk assessment and risk management for such actions are crucial to making them successful (Flyvbjerg 2006). Risk assessment is a common first step in a Risk management process For non-business risks see Risk or the disambiguation page Risk analysis. Bent Flyvbjerg (born in Denmark December 10 1952 is an urban geographer and planner who has written extensively about Megaprojects, Power and Rationality

Since Risk assessment and management is essential in security management, both are tightly related. Security assessment methodologies like BEATO or CRAMM contain risk assessment modules as an important part of the first steps of the methodology. Security is the condition of being protected against danger loss and criminals History CRAMM (CCTA Risk Analysis and Method Management was created in 1987 by the central Agency of Data Processing and Telecommunications of the United Kingdom government On the other hand, Risk Assessment methodologies, like Mehari evolved to become Security Assessment methodologies. MEHARI (Méthode Harmonisée d'Analyse de Risques &mdash Harmonised Risk Analysis Method is a method for risk analysis and Risk management created by CLUSIF (French A ISO standard on risk management (Principles and guidelines on implementation) is currently being draft under code ISO/DIS 31000. Target publication date 30 May 2009

Risk in auditing

The audit risk model expresses the risk of an auditor providing an inappropriate opinion of a commercial entity's financial statements. Events 1416 - The Council of Constance, called by the Emperor Sigismund a supporter of Antipope John XXIII burns Jerome of Prague following This article is about the year For the film see 2009 Lost Memories. Audit risk is a term that is commonly applied in relation to the audit of the financial statements of an entity The most general definition of an audit is an evaluation of a person organization system process project or product It can be analytically expressed as:

AR = IR x CR x DR

Where AR is audit risk, IR is inherent risk, CR is control risk and DR is detection risk.

Categories of risks

• Political: Change of government, cross cutting policy decisions (e. g. , the Euro).
• Professional: Associated with the nature of each profession.
• Economic: Ability to attract and retain staff in the labour market; exchange rates affect costs of international transactions; effect of global economy on UK economy.
• Socio-cultural: Demographic change affects demand for services; stakeholder expectations change.
• Health and Safety: Buildings, vehicles, equipment, fire, noise, vibration, asbestos, chemical and biological hazards, food safety, traffic management, stress, lone working, etc.
• Technological: Obsolescence of current systems; cost of procuring best technology available, opportunity arising from technological development.
• Contractual: Associated with the failure of contractors to deliver devices or products to the agreed cost and specification.
• Environmental: Buildings need to comply with changing standards; disposal of rubbish and surplus equipment needs to comply with changing standards.
• Physical: Theft, vandalism, arson, building related risks, Storm, flood, other related weather, damage to vehicles, mobile plant and equipment.
• Operational: Relating to existing operations – both current delivery and building and maintaining.

See also

Benefit shortfall Hazard hazard prevention Emergency crisis Applied Information Economics Adventure Cindynics Civil defense Cost overrun Ergonomy Event chain methodology International Risk Governance Council Life-critical system Loss aversion Optimism bias Political risk Prevention Probabilistic risk assessment Cultural Theory of risk

Reference class forecasting Risk analysis Risk aversion Risk homeostasis Risk management Risk-neutral measure Risk perception Risk register Systemic risk Uncertainty Value at risk Insurance industry Financial risk Credit risk Interest rate risk Legal risk Liquidity risk Market risk Investment risk Reinvestment risk

References

Articles & Papers

• Clark, L. , Manes, F. , Antoun, N. , Sahakian, B. J. , & Robbins, T. W. (2003). "The contributions of lesion laterality and lesion volume to decision-making impairment following frontal lobe damage. " Neuropsychologia, 41, 1474-1483.
• Drake, R. A. (1985). "Decision making and risk taking: Neurological manipulation with a proposed consistency mediation. " Contemporary Social Psychology, 11, 149-152.
• Drake, R. A. (1985). "Lateral asymmetry of risky recommendations. " Personality and Social Psychology Bulletin, 11, 409-417.
• Flyvbjerg, B. (2006). "From Nobel Prize to Project Management: Getting Risks Right." Project Management Journal, vol. 37, no. 3, August, pp. 5-15.
• Hansson, Sven Ove. (2007). "Risk", The Stanford Encyclopedia of Philosophy (Summer 2007 Edition), Edward N. Zalta (ed. ), forthcoming [5].
• Holton, Glyn A. (2004). "Defining Risk", Financial Analysts Journal, 60 (6), 19–25. A paper exploring the foundations of risk. (PDF file)
• Knight, F. H. (1921) Risk, Uncertainty and Profit, Chicago: Houghton Mifflin Company. (Cited at: [6], § I. I. 26. )
• Kruger, Daniel J. , Wang, X. T. , & Wilke, Andreas (2007) "Towards the development of an evolutionarily valid domain-specific risk-taking scale" Evolutionary Psychology (PDF file)
• Miller, L. (1985). "Cognitive risk taking after frontal or temporal lobectomy I. The synthesis of fragmented visual information. " Neuropsychologia, 23, 359 369.
• Miller, L. , & Milner, B. (1985). "Cognitive risk taking after frontal or temporal lobectomy II. The synthesis of phonemic and semantic information. " Neuropsychologia, 23, 371 379.

Books

• Historian David A. Moss's book When All Else Fails explains the U.S. government's historical role as risk manager of last resort. David A Moss is a Writer and Professor at the Harvard Business School of the Harvard University in Cambridge Massachusetts, The federal government of the United States is the central United States Governmental body established by the United States Constitution.
• Peter L. Bernstien. Against the Gods ISBN 0-471-29563-9. Risk explained and its appreciation by man traced from earliest times through all the major figures of their ages in mathematical circles.
• Porteous, Bruce T. ; Pradip Tapadar (2005). Economic Capital and Financial Risk Management for Financial Services Firms and Conglomerates. Palgrave Macmillan. ISBN 1-4039-3608-0.  
• Tom Kendrick (2003). Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project. AMACOM/American Management Association. ISBN 978-0814407615.  
• Lev Virine & Michael Trumper (2007). Project Decisions: The Art and Science. Management Concepts. ISBN 978-1567262179.  
• David Hillson (2007). Practical Project Risk Management: The Atom Methodology. Management Concepts. ISBN 978-1567262025.  
• Kim Heldman (2005). Project Manager's Spotlight on Risk Management. Jossey-Bass. ISBN 978-0782144116.  

Magazines and Journals

• Actuarial News And Risk Management Resource
• Actuary .NET Actuarial News and Risk Management Info
• Risk and Insurance
• Risk Analysis: An International Journal
• Journal of Risk Research

Societies

• The Society for Risk Analysis
• The Operations Security Professional's Association (OSPA)
• PMI Risk Management SIG (RiskSIG)

External links

• Risk - The entry of the Stanford Encyclopedia of Philosophy
• ATSDR - A Primer on Risk Communication Principles and Practices U. S. Department of Health and Human Services (public domain)
• ATSDR - Evaluation Primer on Health Risk Communication Programs U. The United States Department of Health and Human Services ( HHS) is a Cabinet department of the United States government with the goal of protecting S. Department of Health and Human Services (public domain)
• EPA's Risk Assessment Portal - with links to guidance documents, applicable laws, and EPA Risk Assessments
• The Risk Management Guide - A to Z and FAQ info

The United States Department of Health and Human Services ( HHS) is a Cabinet department of the United States government with the goal of protecting

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