Chapter 1 Risk and Its Treatment
“When we take a risk, we are betting on an outcome that will result from a decision we have made, though we do not know for certain what the outcome will be.”
Peter L. Bernstein
Against the Gods: The Remarkable Story of Risk
Learning Objectives
After studying this chapter, you should be able to
Explain the historical definition of risk.
Explain the meaning of loss exposure.
Understand the following types of risk:
– Pure risk
– Speculative risk
– Diversifiable risk
– Nondiversifiable risk
– Enterprise risk
– Systemic risk
Identify the major pure risks that are associated with great economic insecurity.
Show how risk is a burden to society.
Explain the major techniques for managing risk.
Jason, age 24, is a senior ...
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