Risk Management Stack Flashcards

1
Q

What is needed to attain risk measurement?

A

Accurate modeling

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2
Q

Prediction

A

Concrete statement about what will and will not happen.

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3
Q

Statement of probability

A

Relative likelihood of a given outcome.

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4
Q

Does FAIR use prediction or probabilities?

A

Probabilities.

Making probabilistic statements about what might happen.

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5
Q

Probable vs. possible

A

FAIR cares about probable. Anything is possible but not probable.

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6
Q

Subjective vs. Objective

A

Subjective is based on feelings. Objective is based on data (as much as reasonably available).

Subjectivity can never be eliminated.

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7
Q

Accuracy vs. Precision

A

Better to give accurate range than a precise range that could be wrong.

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8
Q

How accurate should estimates be?

A

Accurate with a useful level of precision.

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