Welcome to TEC Risk Review,

Risk , the probability or chance of loss is an existential reality. Risk lurks in the existence of all entities. Consequently, its absolute elimination is always elusive. The elusiveness of Risk perpetuates Risk, thus leaving only the reduction of Risk as an existential possibility. Best Risk is realized when the gain in Risk reduction equals zero.

It is evident from the above definition of risk , that probability and loss are fundamental concepts in risk theory . What is a loss ? A loss is a change that impacts the existential state of an entity negatively . Consider an entity X who owns a property y . Suppose y is stolen, then there is a change in the existential state of X with respect to the ownership of y. If X values y , then a loss has occurred in the mathematical sense. If X does not value y, then a loss has occurred in the ordinary sense. In other words, the mathematics of risk entails valuation . A loss is not always permanent. It can be temporary. For example, y can be returned in tact to X. The Lost And Found Units of businesses are established to foster temporary losses.

Probability measures the likelihood of the occurrence of an event. This likelihood is mapped into a set of probabilities that has 0 as its minimum and 1 as its maximum. A probability of 0 implies certainty of non-occurrence. A probability of 1 implies certainty of occurrence. Inbetween these boundary probabilities are the other probabilities of the occurrence of the event.

The objective here, is to examine the fundamental concepts of risk and to determine Best Risk Models for selected existential scenarios.