what is the formula for calculating risk?
449013
The risk equation I use is quite simple: risk equals impact multiplied by probability weighed against the cost: Risk=Impact X Probability / Cost. Impact is the effect on the organization should a risk event occur. Probability is the likelihood the event could occur within a given timeframe.
179250
['FV represents the future value of the investment.', 'PV represents the present value of the investment.', 'i represents the rate of interest earned each period.', 'n represents the number of periods.']
860359
One method of calculating the return of insurance policy is to use a simple formula. You need to subtract the paid premiums with the total cash value of the policy and dividing the result with the total number of premiums paid on the policy. When you multiply the resultant with 100, you can get the rate of return.
1135037
['Compute alpha (α): α = 1 - (confidence level / 100)', 'Find the critical probability (p*): p* = 1 - α/2.', 'To express the critical value as a z-score, find the z-score having a cumulative probability equal to the critical probability (p*).']
270042
['Formula to calculate cost price if selling price and profit percentage are given: CP = ( SP * 100 ) / ( 100 + percentage profit).', 'Formula to calculate cost price if selling price and loss percentage are given: CP = ( SP * 100 ) / ( 100 – percentage loss ).']
439740
It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these results. For example, if an investment has a 50% chance of gaining 20% and a 50% chance of losing 10%, the expected return is 5% (50% x 20% + 50% x -10% = 5%).
609889
The formula for present value is PV = FV ÷ (1+r)^n; where FV is the future value, r is the interest rate and n is the number of periods. Using information from the above example, PV = 10,000÷(1+. 03)^5, or $8,626.09, which is the amount you would need to invest today.
946898
['Enter the current value and expected rate of return for each investment.', 'Indicate the weight of each investment.', 'Calculate the overall portfolio rate of return.']
308144
Subtract the risk-free rate of return from the market rate of return. Take that result and multiply it by the beta of the security. Add the result to the current risk-free rate of return to determine the required rate of return.
1230222
The formula for failure rate is: failure rate= 1/MTBF = R/T where R is the number of failures and T is total time. This tells us that the probability that any one particular device will survive to its calculated MTBF is only 36.8%.
1198698
The probabilities range from zero to one, and are often represented as a percentage (0 % to 100%). The formula for translating a hazard ratio to a probability is: probability = (hazard ratio) / (1 + hazard ratio).
138542
Probability formula is the ratio of number of favorable outcomes to the total number of possible outcomes. Measures the likelihood of an event in the following way: - If P(A) > P(B) then event A is more likely to occur than event B. - If P(A) = P(B) then events A and B are equally likely to occur.
918454
There's a couple of different formulas, depending on if you have dependent events or independent events. Formula for the probability of A and B (independent events): p(A and B) = p(A) * p(B). If the probability of one event doesn't affect the other, you have an independent event.
308074
“Risk” refers to the probability of occurrence of an event or outcome. Statistically, risk = chance of the outcome of interest/all possible outcomes. The term “odds” is often used instead of risk.
908715
['Risk management process. ... ', 'Step 1: Identify the Risk. ... ', 'Step 2: Analyze the risk. ... ', 'Step 3: Evaluate or Rank the Risk. ... ', 'Step 4: Treat the Risk. ... ', 'Step 5: Monitor and Review the risk. ... ', 'The basics of the risk management process stay the same. ... ', 'Risk management.']
86706
['20% (PD) x 70% (LGD) x 1 000 (EAD); PLUS.', '80% (=probability of NO default = 100% – PD) x 0% (zero loss) x 1 000 (EAD)', '= 140.']
150599
['2 to 5 odds. This means that out of 7 possible outcomes, odds are that there will be 2 of one kind of outcome and 5 of another kind of outcome. ... ', '2 to 5 probability. There is a 28.57 percent probability of a particular outcome and 71.43 percent probability of another outcome.', '2 to 5 odds payout.']