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By Any Account, Taking A Flight In A Piece Of Metal Whose Outer Skin Is Thin, ...

By any account, taking a flight in a piece of metal whose outer skin is thin, with the entire container flexing while one travels at speeds in excess of 400 km would not only sound risky to those born in ancient Rome, it would be viewed as insane. Thus risk is a changing variable based upon our degrees of exposure, the exposure of others, and its place in what we subscribe to as normal routines. Risk taking for one used to making investments, such as a financier, stock trader or venture capitalist, whose circle of acquaintances, friends, upbringing, and experiences is less than it is for a doctor, lawyer, cab driver or railroad engineer, as they lack the exposure, and mental familiarity that underpins uncertainty, and how to deal with it. The foregoing represents the third of Starr's (1969, pp. 1234) three laws describing behavioral phenomena 3. The acceptable level of risk is inversely related to the number of persons exposed to that risk. The other two segments of this law are (1969, p. 1238):
1. The public is willing to accept voluntary risks about 1,000 times greater than involuntary risks.
2. The acceptability of risks appears to be roughly proportional to the third power of the benefits
Starr's (1969, p. 1238) three putative laws however have not gained wide spread acceptance with risk specialists on all grounds, however there are those who agree with his assertion that there is a relationship between risk acceptability ad benefits. Otway and Chen (1975, pp. 76-80) however found that through a replication of the analysis that the resulting data did not support Starr's (1969, p. 1238) assertion in qualitative formulations, and instead found that individuals were indeed willing to accept high involuntary risks with large benefits. Despite the findings of Otway and Chen (1975, pp. 76-80) the jury is still out regarding Starr's (1969, p. 1238) three putative laws. And while we have been discussing risk as on an individual basis, risk exists in all forms, thus the exploration of it in institutions also has relevance as it is still a human facet.
Culp (2001, p. 15) advises that we find it tempting to associate definition of risk with measures of risk, such as the variance of returns on some asset or in order mathematical means. Culp (2001, p. 15) asserts that risk can be shown through mathematical formulas to that make sense in illustrative purposes, adding that Risk is a concept, not a particular statistical construct. In further exploring risk, Culp (2001, p. 15) adds that attempting to glean an understanding of risk at the conceptual level is a daunting task. He states that there is a tendency to use terms such as interest rate risk, maturity, accident, credit and so forth, which have their applications, and adds that the conceptualization of the definition of risk varies with the perspective (Culp, 2001, p. 15).


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