ERM [23]

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Bullet points include: Some risks can be quantified, others cannot, usually shades of grey Firms with the best risk management disciplines/frameworks often use multiple models for valuation and risk purposes Knight (1921): Risk, Uncertainty and Profit Explored role of entrepreneur, highlighted that some risks inherently uncertain Incidentally viewed ‘actuarial’ methodologies as techniques for quantifying risk when it can be ‘intrinsically’ quantified (he wasn’t an actuary) Either via law of averages or via valid comparability through time Many business risks are not (fully) analysable in this manner! C.f. known unknowns, unknown unknowns, black swans

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