Describing risk, Microeconomics

Describing Risk

* To measure risk we should know:

 1) All the outcomes which are possible.

 2) The probability that each outcome will occur.

* Interpreting Probability

- The probability of the given outcome to occur

* Interpreting Probability

- The probability which the given outcome will occur

- Objective Interpretation

  • Based on frequency which is observed of past events

- Subjective

  • Based on experience or perception with or without an observed frequency

-  Different information or abilities to process the same information can influence subjective probability 

Posted Date: 10/10/2012 8:15:52 AM | Location : United States







Related Discussions:- Describing risk, Assignment Help, Ask Question on Describing risk, Get Answer, Expert's Help, Describing risk Discussions

Write discussion on Describing risk
Your posts are moderated
Related Questions
In relation to solvency margins in the insurance industry, the solvency margin is the amount of regulatory capital an insurance undertaking is obliged to hold against unforeseen ev

What is Economic Theory? An economic theory that can be considered an axiomatic approach comprise a set of assumptions and circumstances, an analytical framework and explanatio

Where the equation of isoquent drived from?

Critically appraise the IS-LM and the AD-AS models as analytical tools in explaining the macro-economy (the business cycle). In preparing your essay, please think about the followi

Consider the following flow (in thousands of people) between the various labour market states in a particular month:

discuss the law of variable proportion with the help of isoquants

Discretionary Fiscal Policy: Some government taxing and spending programs can be adjusted by government in response to changing economic circumstances. These discretionary measures

1. The following data consists of a 3 (age) x 2 (sex) natural design in which the proportion of pretend play between parents and infants changes as a function of age.  The DV (Y) i


Balance of Payments and Developing Economies: It is well-known in development economics that UDCs invariably start as debtor economies. In the process of development itself, t