BUSS 5292 Topic 3 Sources of Risk 代写
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Risk Management
BUSS 5292
Topic 3
Sources of Risk:
From nature to nurture
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Course Facilitator: Kesten Green
Study Period 1, 2016
Risk is all around us…
q Natural physical environment (“act of God”)
(e.g. toxins, meteorological, geophysical)
q Natural living environment (fauna & flora)
(e.g. toxins, allergens, diseases, wildlife, tree fall, wildfire)
q Manmade physical environment
(e.g. by-products, flaws, failures (leakages & collapses))
q Own genetics and actions
(e.g. disease, mistakes, mishaps, misadventure)
q Social environment
(e.g. mistakes, mishaps, misadventure, misinterpretation,
misrepresentation, negligence, malpractice, fraud,
malinvestment, malfeasance, maladministration, corruption,
crime, terrorism, war)
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So what’s to worry about?
q Long-standing well-known easily-
quantified* risks
(e.g. from natural world, own actions, and social
environment)
q Speculative harder-to-quantify risks
(e.g. from human productive activities, and from
government statements and actions)
*Data are available on frequencies of occurance and
size of impact.
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How to quantify risk
q Identify relevant data sources*
q Relative frequency, e.g.
q “Causes of death, 2013”
q “...falling trees..”
q victimisation rates
q bankruptcies
q business failures
q share market prices
q Impact, e.g.
q lives lost
q dollar values
q Calculate probabilities and expected values
*See example resources under Topic 3.
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What about harder-to-quantify risk?
q Look to objective studies*
q Experiments
q Replications
q Meta analyses
q Look to analogous data*
q Similar situations that occurred in the past
*See the following example resources under Topic 3
that are objective studies that also provide analogous
data: “But is it true?”; “Hyping health risks”; “Bad
environmental and resources scares”; “Extraordinary
popular delusions”
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Examples of speculative health risks*
q Evironmental causes of breast cancer
q Electromagnetic fields
q Residential radon
q Passive smoking
*See Kabat (2008)
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Examples of environmental scares*
q DDT
q Acid rain
q Agent orange
q Love Canal
q Mercury in fish
q Asbestos
q Etc...
*See Simon; Wildavsky
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Examples of resource scares*
q e.g. Peak oil
q Timber famine
q Copper crises
*See Simon (1998)
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US Shale Resources
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Source: Federation of American Scientists
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Examples of risky grand schemes*
q Tulip mania
q The Mississippi company
q South Sea bubble
q etc.
*Mackay (1852)
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Examples of travel risk (mis?)calculation*
q Travel deaths after September 11, 2001
q Fear of “dread risk” leads to more deaths
q Estimated extra deaths on road: 1,500
*See Gigerenzer (2006); chart on p. 349
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Risky investments and “beating the market”*
q Do stock pickers outperform the
sharemarket average?
q No.
q So how do you manage risk as an investor?
q Buy a broad index fund with low fees.
*See interview with Burton Malkiel, author of
“A random walk down Wall Street”
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What are business leaders worried about, now?
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CEO responses to
PwC on what they
consider the top
threats to business
growth. Photograph:
PwC
BUSS 5292 Topic 3 Sources of Risk 代写