Variants of Risk and Opportunity

Abstract

The common definition of risk has not explicitly included the time element. This limits our ability to effectively model the risk resolution process. This paper first introduces variants of risks and proposes a risk life cycle that can better communicate and track the evolution of risk from its initial identification to its final deposition. We also introduce opportunity variants and an opportunity life cycle. A number of indicators based on these variants are defined to better monitor risk management and opportunity management performance.