RMI-2302 Lecture Notes - Lecture 8: Behavioral Analytics, Operational Risk, Investopedia
2 Mar 2017
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Overview of risk for corporations: lots of ways (categories) of looking at risk at the organizational level. Business risk, operational risk, hazard risk, financial risk, strategic risk. Expertise, risk management techniques, reports to stakeholders. Categories may not be mutually exclusive: business risk. Investopedia does a better job than wikipedia on this definition. Can be caused by many things, prices, regulation, competition, etc. Very broad category, many will define as risk caused by operational, hazard, financial, or strategic risks: operational risk. Focus on bp case and analytics readings. Risk that is incurred by a company"s operatio(cid:374) Typically used in insurance industry to describe potential losses that only have a down side. Ex) fire, auto accident, tornado, earthquake: financial risk. Anything to do with financing or financial transactions that include things such as credit risk and market risk, liquidity risk, etc. Potential variation due to financial causes: strategic risk. Potential losses (variation) from poor business decisions.
