P1T1 - Foundations of risk management - Crouhy - The essentials...

[tkvfrm]

Financial risk is defined as volatility of unexpected losses-So in the risk management process when we scan the horizon and identify potential risks and devise a risk management strategy are we not now in the zone of 'expected losses'; Which would mean it is not 'unexpected' any more and does not qualify as a risk.

 

[Shikhar_Pachori]

No thats not become expected risk ..see the example given in the readings. Expected Risk is like fee of school you need to pay to study..already determined..not something which is at horizon and not fixed and confirmed.