Risk

Decision making Sample flowchart representing the decision process to add a new article to Wikipedia. Decision-making can be regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice that may or may not prompt action. Decision-making is the study of identifying and choosing alternatives based on the values and preferences of the decision maker. Decision-making is one of the central activities of management and is a huge part of any process of implementation. Overview[edit] Edit human performance with regard to decisions has been the subject of active research from several perspectives: Decision-making can also be regarded as a problem-solving activity terminated by a solution deemed to be satisfactory. Some have argued that most decisions are made unconsciously. In regards to management and decision-making, each level of management is responsible for different things.

Corporate governance There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 2001–2002, most of which involved accounting fraud. Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance. In the U.S., these include Enron Corporation and MCI Inc. (formerly WorldCom). Their demise is associated with the U.S. federal government passing the Sarbanes-Oxley Act in 2002, intending to restore public confidence in corporate governance. Comparable failures in Australia (HIH, One.Tel) are associated with the eventual passage of the CLERP 9 reforms. Other definitions[edit] Economic analysis has resulted in a literature on the subject.[11] One source defines corporate governance as "the set of conditions that shapes the ex post bargaining over the quasi-rents generated by a firm Continental Europe[edit]

Retirement spend-down At retirement, individuals stop working and no longer get employment earnings, and enter a phase of their lives, where they rely on the assets they have accumulated, to supply money for their spending needs for the rest of their lives. Retirement spend-down, or withdrawal rate,[1][2][3][4][5] is the strategy a retiree follows to spend, decumulate or withdraw assets during retirement. Retirement planning aims to prepare individuals for retirement spend-down, because the different spend-down approaches available to retirees depend on the decisions they make during their working years. Actuaries and financial planners are experts on this topic. Importance[edit] More than 10,000 Post-World War II baby boomers will reach age 65 in the United States every day between 2014 and 2027.[6] This represents the majority of the more than 78 million Americans born between 1946 and 1964. Longevity risk[edit] The probabilities of a 65-year-old living to various ages are:[12] Withdrawal rate[edit] Output

Intuition (philosophy) Intuition is a priori knowledge or experiential belief characterized by its immediacy. Beyond this, the nature of intuition is debated. Roughly speaking, there are two main views. They are: Intuitions are a priori. In the philosophy of Immanuel Kant, intuition is thought of as basic sensory information provided by the cognitive faculty of sensibility (equivalent to what might loosely be called perception). In contemporary analytic philosophy, appeals to our intuitions are an important method for testing claims. The metaphilosophical assumption that philosophy depends on intuitions has recently been challenged by some philosophers. Jump up ^ Immanuel Kant (1787) "Critique of Pure Reason", p35 et seq.

Risk management Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events[1] or to maximize the realization of opportunities. The strategies to manage threats (uncertainties with negative consequences) typically include transferring the threat to another party, avoiding the threat, reducing the negative effect or probability of the threat, or even accepting some or all of the potential or actual consequences of a particular threat, and the opposites for opportunities (uncertain future states with benefits). Introduction[edit] A widely used vocabulary for risk management is defined by ISO Guide 73, "Risk management. Vocabulary Risk management also faces difficulties in allocating resources. Method[edit] Principles of risk management[edit] Risk management should: Process[edit]

Risk appetite Type of risk an organization is willing to pursue ISO 31000 defines risk appetite as the "amount and type of risk that an organization is willing to pursue or retain. Risk appetite is burdened by inconsistent or ambiguous definitions, but rigorous risk management studies have helped remedy the lack of consensus.[4] This remainder of this section compares the standardized definition of risk appetite with other related terms. Since risk appetite can be stratified into levels of risk, risk threshold can be defined as the upper limit of risk appetite.[5][6] Risk threshold can also be defined as the maximal exposure[7] before risk treatment (i.e, action to reduce risk) is necessary. Risk appetite is often used ambiguously to mean either all of the levels of risk below the threshold, or just the threshold level. Whereas risk appetite is how much risk an organization is willing to take on, risk tolerance is how much risk an organization is capable of taking on. Purpose and benefits [edit]

Awareness Concept[edit] Awareness is a relative concept. An animal may be partially aware, may be subconsciously aware, or may be acutely unaware of an event. Awareness may be focused on an internal state, such as a visceral feeling, or on external events by way of sensory perception. Awareness provides the raw material from which animals develop qualia, or subjective ideas about their experience. Insects have awareness that you are trying to swat them or chase after them. Self-awareness[edit] Main article: Self-awareness Popular ideas about consciousness suggest the phenomenon describes a condition of being aware of one's awareness or, self-awareness.[2] Efforts to describe consciousness in neurological terms have focused on describing networks in the brain that develop awareness of the qualia developed by other networks.[3] Neuroscience[edit] Basic awareness[edit] Basic awareness of one's internal and external world depends on the brain stem. Basic interests[edit] Changes in awareness[edit]

ISO 31000 ISO 31000 is a family of standards relating to risk management codified by the International Organization for Standardization. The purpose of ISO 31000:2009 is to provide principles and generic guidelines on risk management. ISO 31000 seeks to provide a universally recognised paradigm for practitioners and companies employing risk management processes to replace the myriad of existing standards, methodologies and paradigms that differed between industries, subject matters and regions. Currently, the ISO 31000 family is expected to include: ISO 31000:2009 - Principles and Guidelines on Implementation[1]ISO/IEC 31010:2009 - Risk Management - Risk Assessment TechniquesISO Guide 73:2009 - Risk Management - Vocabulary ISO also designed its ISO 21500 Guidance on Project Management standard to align with ISO 31000:2009.[2] Introduction[edit] ISO 31000 was published as a standard on the 13th of November 2009, and provides a standard on the implementation of risk management. Scope[edit]

Replicating portfolio In practice, replicating portfolios are seldom, if ever, exact replications. Most significantly, unless they are claims against the same counterparties, there is credit risk. Further, dynamic replication is invariably imperfect, since actual price movements are not infinitesimal – they may in fact be large – and transaction costs to change the hedge are not zero. Derivatives pricing [edit] Dynamic replication is fundamental to the Black–Scholes model of derivatives pricing, which assumes that derivatives can be replicated by portfolios of other securities, and thus their prices determined. In limited cases static replication is sufficient, notably in put–call parity. An important technical detail is how cash is treated. In the valuation of a life insurance company, the actuary considers a series of future uncertain cashflows (including incoming premiums and outgoing claims, for example) and attempts to put a value on these cashflows.