Risk managementRisk management is the identification, evaluation, 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 or impact of unfortunate events or to maximize the realization of opportunities.
RiskIn simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences. Many different definitions have been proposed. The international standard definition of risk for common understanding in different applications is "effect of uncertainty on objectives".
Risk assessmentRisk assessment determines possible mishaps, their likelihood and consequences, and the tolerances for such events. The results of this process may be expressed in a quantitative or qualitative fashion. Risk assessment is an inherent part of a broader risk management strategy to help reduce any potential risk-related consequences. More precisely, risk assessment identifies and analyses potential (future) events that may negatively impact individuals, assets, and/or the environment (i.e. hazard analysis).
Failure mode and effects analysisFailure mode and effects analysis (FMEA; often written with "failure modes" in plural) is the process of reviewing as many components, assemblies, and subsystems as possible to identify potential failure modes in a system and their causes and effects. For each component, the failure modes and their resulting effects on the rest of the system are recorded in a specific FMEA worksheet. There are numerous variations of such worksheets.
Failure rateFailure rate is the frequency with which an engineered system or component fails, expressed in failures per unit of time. It is usually denoted by the Greek letter λ (lambda) and is often used in reliability engineering. The failure rate of a system usually depends on time, with the rate varying over the life cycle of the system. For example, an automobile's failure rate in its fifth year of service may be many times greater than its failure rate during its first year of service.
Failure causeFailure causes are defects in design, process, quality, or part application, which are the underlying cause of a failure or which initiate a process which leads to failure. Where failure depends on the user of the product or process, then human error must be considered. A part failure mode is the way in which a component failed "functionally" on the component level. Often a part has only a few failure modes. For example, a relay may fail to open or close contacts on demand.
Mean time between failuresMean time between failures (MTBF) is the predicted elapsed time between inherent failures of a mechanical or electronic system during normal system operation. MTBF can be calculated as the arithmetic mean (average) time between failures of a system. The term is used for repairable systems while mean time to failure (MTTF) denotes the expected time to failure for a non-repairable system. The definition of MTBF depends on the definition of what is considered a failure.
Financial riskFinancial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent. A science has evolved around managing market and financial risk under the general title of modern portfolio theory initiated by Harry Markowitz in 1952 with his article, "Portfolio Selection".
Operational riskOperational risk is the risk of losses caused by flawed or failed processes, policies, systems or events that disrupt business operations. Employee errors, criminal activity such as fraud, and physical events are among the factors that can trigger operational risk. The process to manage operational risk is known as operational risk management.
Plasma displayA plasma display panel (PDP) is a type of flat panel display that uses small cells containing plasma; ionized gas that responds to electric fields. Plasma televisions were the first large (over 32 inches diagonal) flat panel displays to be released to the public. Until about 2007, plasma displays were commonly used in large televisions. By 2013, they had lost nearly all market share due to competition from low-cost LCDs and more expensive but high-contrast OLED flat-panel displays.
Euler methodIn mathematics and computational science, the Euler method (also called the forward Euler method) is a first-order numerical procedure for solving ordinary differential equations (ODEs) with a given initial value. It is the most basic explicit method for numerical integration of ordinary differential equations and is the simplest Runge–Kutta method. The Euler method is named after Leonhard Euler, who first proposed it in his book Institutionum calculi integralis (published 1768–1870).
Market riskMarket risk is the risk of losses in positions arising from movements in market variables like prices and volatility. There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the most commonly used types of market risk are: Equity risk, the risk that stock or stock indices (e.g. Euro Stoxx 50, etc.) prices or their implied volatility will change. Interest rate risk, the risk that interest rates (e.g. Libor, Euribor, etc.) or their implied volatility will change.
Iterative methodIn computational mathematics, an iterative method is a mathematical procedure that uses an initial value to generate a sequence of improving approximate solutions for a class of problems, in which the n-th approximation is derived from the previous ones. A specific implementation with termination criteria for a given iterative method like gradient descent, hill climbing, Newton's method, or quasi-Newton methods like BFGS, is an algorithm of the iterative method.
3D displayA 3D display is a display device capable of conveying depth to the viewer. Many 3D displays are stereoscopic displays, which produce a basic 3D effect by means of stereopsis, but can cause eye strain and visual fatigue. Newer 3D displays such as holographic and light field displays produce a more realistic 3D effect by combining stereopsis and accurate focal length for the displayed content. Newer 3D displays in this manner cause less visual fatigue than classical stereoscopic displays.
Heun's methodIn mathematics and computational science, Heun's method may refer to the improved or modified Euler's method (that is, the explicit trapezoidal rule), or a similar two-stage Runge–Kutta method. It is named after Karl Heun and is a numerical procedure for solving ordinary differential equations (ODEs) with a given initial value. Both variants can be seen as extensions of the Euler method into two-stage second-order Runge–Kutta methods.
Risk premiumA risk premium is a measure of excess return that is required by an individual to compensate being subjected to an increased level of risk. It is used widely in finance and economics, the general definition being the expected risky return less the risk-free return, as demonstrated by the formula below. Where is the risky expected rate of return and is the risk-free return. The inputs for each of these variables and the ultimate interpretation of the risk premium value differs depending on the application as explained in the following sections.
Display deviceA display device is an output device for presentation of information in visual or tactile form (the latter used for example in tactile electronic displays for blind people). When the input information that is supplied has an electrical signal the display is called an electronic display. Common applications for electronic visual displays are television sets or computer monitors. Electronic visual display These are the technologies used to create the various displays in use today.
Financial risk managementFinancial risk management is the practice of protecting economic value in a firm by managing exposure to financial risk - principally operational risk, credit risk and market risk, with more specific variants as listed aside. As for risk management more generally, financial risk management requires identifying the sources of risk, measuring these, and crafting plans to address them. See for an overview. Financial risk management as a "science" can be said to have been born with modern portfolio theory, particularly as initiated by Professor Harry Markowitz in 1952 with his article, "Portfolio Selection"; see .
Jacobi methodIn numerical linear algebra, the Jacobi method (a.k.a. the Jacobi iteration method) is an iterative algorithm for determining the solutions of a strictly diagonally dominant system of linear equations. Each diagonal element is solved for, and an approximate value is plugged in. The process is then iterated until it converges. This algorithm is a stripped-down version of the Jacobi transformation method of matrix diagonalization. The method is named after Carl Gustav Jacob Jacobi.
AnalysisAnalysis (: analyses) is the process of breaking a complex topic or substance into smaller parts in order to gain a better understanding of it. The technique has been applied in the study of mathematics and logic since before Aristotle (384–322 B.C.), though analysis as a formal concept is a relatively recent development. The word comes from the Ancient Greek ἀνάλυσις (analysis, "a breaking-up" or "an untying;" from ana- "up, throughout" and lysis "a loosening"). From it also comes the word's plural, analyses.
