ERM Concepts [9]

Go to: Summary | Previous | Next   
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. 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! Known unknowns, unknown unknowns, black swans

Contents | Prev | Next | ERM Lecture Series

Desktop view | Switch to Mobile