Welcome to the module Concepts and terminology in quantitative risk assessment.

This module introduces and explains the central concepts in the context of risk modelling. In particular, it offers a fundamental building block to support systematic risk identification. Likewise, the approach for the precise description of a case of risk exposure is presented, thereby explaining terms such as risk phenomenon, risk object, direct hazard, indirect hazard, risk indicator and risk measure.

Particular attention is paid to understanding the concept of loss and profit types, as this is an elementary feature of the further assessment of risk variables. Thus, in the case of a loss variable, a high value is critical and therefore to be assessed as a risk, whereas in the case of a profit, a high value is quite desirable. Conversely, a small loss is not risk-relevant, whereas a small profit certainly is.

We hope you enjoy working through this module.

Learning goals for module 1 | Concepts and terminology in quantitative risk modelling

The objective is to master the following material content:
- Central terms and schemes of risk modelling
- Basics of systematic risk identification
- Description of cases of risk exposure
- Dealing with terminology such as risk phenomenon, risk object, direct danger, indirect danger, risk indicator and risk measure
- Loss and profit type as well as upside and downside risks

Learning module 1 | Concepts and terminology of quantitative risk modelling

- Central terms of risk modelling
- Variables of loss and profit type
- Upside and downside risks
- Risks in learning of risks