Risk model -

The dimensions of Risk

It is a difficult task to model Risk.

You might think that one professional takes more risks than another and that in comparison one professional would have a risk score of 70 and another of 40. That would represent a linear score.

A pyramid provides a suitable structure to properly model the two dimensions of risk so that important functions can be made transparent.

On the one hand, risk is about height or flow component, where quantity plays an important role. On the other hand, it is about a more qualitative level. Together, these form a combination in which both can be found, but in different degrees.

It is possible to assess your risk preference Through a concise assessment.