HOW TO MANAGE RISK

One of my teachers, long back, explained in a nutshell, the concept of Risk Management, which I think he read somewhere.

IDENTIFICATION OF RISK

If I take my girlfriend out to a nightclub, my wife may find out about it.

MEASUREMENT OF RISK

If she does find out, she may leave me and file for divorce.

HANDLING OF RISK

Therefore, I can either say to my girlfriend:

“Put on your dancing shoes and we’ll go to the nightclub.”

or

“We’d better sit at home in your apartment and watch TV.”

That, in brief, is RISK MANAGEMENT - How to Identify, Measure and Handle Risk.