Lecture 01 - Introduction - PAM 4230: Risk Management and...

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PAM 4230: Risk Management and Policy Dr Sharon Tennyson Spring 2009
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Risk A situation in which outcomes are uncertain (and have potential negative consequences) Investments Illness or accident New product introduction Lawsuit Price changes Natural disaster
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Risk Management Process/methods employed to reduce the negative effects of risk on the well being of an individual, business firm, group or society. Risk management tools: Avoid/Control Finance/Transfer Reduce Uncertainty (internal risk reduction)
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Negative Effects of Risk Any losses that occur (direct losses) Secondary effects of losses that occur (indirect losses) Consequences of uncertainty itself Example: stock market investment Example: auto accident risk
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Why Study Risk Management? Risk and how we manage it is critical for individuals and families, businesses and corporations, governments and societies. All are affected by risk and seek ways to mitigate its negative consequences. Health risks
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Lecture 01 - Introduction - PAM 4230: Risk Management and...

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