What is the objective of risk and probability?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
What is the objective of risk and
Risk management is the need of every business . But what is risk ? Risk is the event that not to occur . In every organization whenever a risk comes then immediately they start finding their probability . Probability generally a number or any claim which gives the prediction results .
Risk :
Risk is first relates to uncertainty that may occur or may not occur . Risk is something that not happened yet so we can call it just to backup plan for the future records. As every business and management systems work on different projects , they invest lot of time and invest their money , after completing the project there always be some risky environment like their loss or profits , down prices or can be many more , so to get the idea about them probability provides evidence to their risks.
Probability :
Generally , its definition is chance of occurrence of any event . Probability is possibility , it gives estimates for the prediction and provides many results for the future purpose . In the management organizations, probability is the possibility of their risks .The probability is a single percentage number and does not have to be exact as long as the group applies a consistent approach to estimating the probabilities for all the risks.
- Probability is lies between 0 to 1. If probability equal to zero we can say risk event does not exist. And if probability equal to one we can say the event is no longer a risk. Thus , Risk is the probability of loss.
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