Chapter 1 - Glossary Flashcards
Define cloud computing.
Info, tech, & storage services contractually provided from remote locations, through the Internet or another network, w/out a direct server connection.
Define correlation.
A relationship btwn variables.
Define cost of risk.
Total cost incurred by an organisation because of possibility of accidental loss.
Define credit risk.
The risk that customers/creditors will fail to make promised payments as they come due.
Define diversifiable risk.
A risk that affects only some individuals, businesses, or small groups.
Define enterprise risk management.
An approach to managing all of an organisation’s key business risks & opportunities w/the intent of maximizing shareholder value.
Define exposure.
Any condition that presents a possibility of gain or loss, whether or not an actual loss occurs.
Define Internet of Things (IoT).
A network that objects that transmit data to computers.
Define Law of Large Numbers.
A mathematical principle stating that as the number of similar but independent exposure units increases, the relative accuracy of predictions about future outcomes (losses) also increases.
Define liquidity risk.
The risk that an asset cannot be sold on short notice w/out incurring a loss.
Define market risk.
Uncertainty about an investment’s future value because of potential changes in the market for that type of investment.
Define nondiversifiable risk.
A risk that affects a large segment of society at the same time.
Define objective risk.
The measurable variation in uncertain outcomes based on facts and data.
Define pure risk.
A change of loss or no loss, but no change of gain.
Define risk profile.
A set of characteristics common to all risks in a portfolio.
