I agree that “risk” should carry a sense of quantity. An outcome might have a very low probability but it’s not much of risk if the stake is small.

]]>A definition of risk that accords with intuition would go beyond probability theory alone and include aspects of decision theory; the risk of a (bad) event happening would be well defined as the probability of it happening multiplied by a quantitative measure of its undesirability (ie, negative of utility function).

]]>So I was pleased to see that there are quite a few equations in the book as I’m after a deeper understanding than you tend to get in the “Janet and John” type texts. I guess once I get around to reading it I will find out if my desire for some proper maths was too ambitious.

]]>Are you certain?

]]>I’m not going to risk replying to that.

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