Weighing the odds
Risk probability, opportunity and valuation.
A short, focused look at weighing the odds: probability judgement and debiasing, treating opportunity as rigorously as threat and valuing uncertainty without trusting models too far.
- Level
- Focus
- Learning time
- 2 hours 30 minutes
- Where
- Strategic Risk
- Price
- £69
When you step up to a higher level, what you paid in the last 12 months for lower-level courses inside the bigger course comes off its price, in proportion to how much of each is inside it, whichever topic it's from. Courses at the same or a lower level don't give credit against each other. A Focus course or above always costs at least £15. Read the full terms
Certificate of Completion, or Certificate of Completion and Assessment with a short assessment
Overview and Outcomes.
Who It's For
Leaders and finance professionals making quantitative risk judgements
Overview
Most risk failures begin with poor probability judgement rather than poor process. This programme sharpens that judgement, drawing on Kahneman and Tversky's biases, Feynman's analysis of the Challenger disaster and practical debiasing tools such as reference class forecasting and the pre-mortem. It extends the risk matrix to capture opportunity, asking when a deliberate bet is justified, then puts numbers on uncertainty through expected monetary value, decision trees, Value at Risk and stress testing. Long-Term Capital Management, Barings, Deepwater Horizon and the Ever Given show why a precise number is never certainty.
Aims
This programme aims to strengthen leaders' quantitative and probabilistic judgement about risk, so they can weigh threats and opportunities with equal rigour, value uncertainty honestly, make deliberate bets where they are justified and recognise the limits of any model, however precise its numbers appear.
In summary, you will be able to:
- Identify common probability biases in risk discussions and apply debiasing tools such as reference class forecasting, structured dissent and written ranges.
- Use expected monetary value, decision trees and a two sided risk matrix to compare options, including doing nothing, and judge when a deliberate bet is justified.
- Assess the limits of risk models, including fat tails and Value at Risk, and decide whether to insure, self-insure, prevent or accept a risk.
What you'll develop
Through this Focus course, you will build the ability to:
- Identify the availability heuristic, the law of small numbers and authority anchoring in live risk discussions.
- Apply reference class forecasting, the pre-mortem, structured dissent and written ranges, and recognise when each has been introduced in a hollow way.
- Apply a two sided risk matrix that assesses opportunity with the same rigour as threat.
- Explain why inaction is also a bet and why a good result is not proof of a good decision.
- Calculate expected monetary value and build a simple decision tree that includes doing nothing as an option.
- Analyse an operational, a catastrophic and an external risk failure by identifying the frameworks that explain each.
Built from 2 parts.
2 hours 30 minutes of learning.
- 01Odds, upside and downsideProbability and the risk-opportunity matrixBitesize2 modules
- 02Putting a price on uncertaintyRisk valuation and risk management case studiesBitesize2 modules
Go deeper, and pay only the difference
- You are hereFocus, 2 hours 30 minutes, £69
- Next stepExplore, Owning the risk, 5 hours, £129. Already own the Focus? You pay £60.
- The whole topicImmerse, Risk worth taking, 9 hours 30 minutes, £249. Already own the Focus? You pay £180.
When you step up to a higher level, what you paid in the last 12 months for lower-level courses inside the bigger course comes off its price, in proportion to how much of each is inside it, whichever topic it's from. Courses at the same or a lower level don't give credit against each other. A Focus course or above always costs at least £15. Prices per person. Read the full terms