risk theory

Risk Theory is a framework used to understand and quantify the likelihood of uncertain events and their potential impacts. It helps individuals and organizations make informed decisions by assessing risks associated with various scenarios. The theory considers factors such as probability, potential outcomes, and the consequences of those outcomes. By analyzing risks, one can develop strategies to mitigate negative effects or capitalize on opportunities. This is applicable in many fields, including finance, insurance, healthcare, and everyday life, facilitating better planning and management in uncertain situations.