35 lines
946 B
Markdown
35 lines
946 B
Markdown
# *The Failure of Risk Management*
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The Failure of Risk Management
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(Why It's Broken and How to Fix It)
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by Douglas W. Hubbard
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## Key Takeaways
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Qualititative risk analysis
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(i.e. risk matricies, scoring charts)
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departs from legitimate statistical methodology
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and has no robust evidence to suggest its efficacy.
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There is good reason to believe that such methods
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are deleterious to their intended purpose
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in contradiction to the common response
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that they are "better than nothing".
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Expected Value (Probability × Magnitude)
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alone can not predict or inform risky decisions,
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except for risk-neutral parties.
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People and organizations are risk-averse
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~~TODO: see chapter 6~~
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## Mentioned Topics and Abbreviations
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Analytic Hierarchy Process (AHP)
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Multi-Attribute Utility Theory (MAUT)
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Actuarial Science
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Options Theory (OT)
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Modern Portfolio Theory (MPT)
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Probabalistic Risk Analysis (PRA)
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Value at Risk (VaR)
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Loss-Exceedance Curve (LEC)
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Risk Tolerance
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