RISK

In our every day life, we are always face to face with some possible events which may result in some loss. For example, your equipments or jewelries at home have the possibility of being theft and this is an uncertain event that we cannot know before it happens but there is a probability and the probability of this uncertain event depends on some conditions like home and conditions in time. The term Risk is used for these uncertain possible events which may result in some loss if occurs.

If we check the field, we see that there are lots of different definitions for the term, “risk”. But the risk definition of SEI, propose the term clearly:

            “Risk is the possibility of suffering loss.” [2]

It is simply stated in the definition that there are two key aspects [3]:

• Some loss must be possible
• There is an uncertainty associated with the mentioned loss

A typical risk has 3 key component as illustrated in Figure 1 below; context, conditions, consequences [3].

Figure 1: Risk Components

Context is the background environment or situation in which a risk is being considered. Conditions define a set of situations that can create the risk and the consequences are the effects or the results of the conditions.