1. Types of Risk Introduction To Business

2. Today’s Goals Define risk and the different types of economic risk. Determine which risks are controllable and uncontrollable. List situations where humans take large risks. Identify situations where risk cannot be avoided

3. Do Now Can you recall a time where you chose to do something that was unwise and risky? Were there any negative consequences? If not, how could you have been negatively affected?

4. Risk exposure to the chance of injury or loss; a hazard or dangerous chance: Ex. It's not worth the risk. Risk Averse- a person who does not like risk.

5. Uncertainty unpredictability; indeterminacy; indefiniteness

6. Economic risk Risk of financial loss due to uncertain or unforeseen events.

7. Pure Risk This presents a chance for loss but no gain. An example is a severe storm such as snow or a tornado which could close a business or cause damage to a building.

8. Non-Economic Risk Inconvenience or Embarrassment may occur without any financial loss Examples are performing in a talent show or meeting new friends

9. Activity/Mini Report Pick any natural disaster: What happened and where? What was lost injured or destroyed? What was the dollar amount of losses? Future problems, clean-up etc. What was learned?

10. Do Now Define probability Why is it so difficult to win the lottery even the results are published daily? How will I use this information in the future?

11. Thursday’s Goals Define probability Determine risk involved in business decision making Calculate probability using independent events. Summarize and quantify risk in various scenarios

12. Activity Flip a coin 10 times and record results Why do you think you got your results? If you flipped 1,000 times would the results differ?

13. Probability a strong likelihood or chance of something Statistics- the relative possibility that an event will occur, as expressed by the ratio of the number of actual occurrences to the total number of possible occurrences.

14. Activity 2 Please see handout