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Northwestern State University Risk Analysis and Security Assessment Discussion

Northwestern State University Risk Analysis and Security Assessment Discussion

Daniel Kevins

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Discuss and explain the strengths and weaknesses of the definitions of risk provided in the textbook.
” Calculate the expected returns in each of the following scenarios:
- We forecast a 50% probability that we would inherit $1 million.
- The probability of a shuttle failure with the loss of all six passengers and crew is 1%.
- The probability of terrorist destruction of site S (value: $100 million) is 20%.
- If the project fails, we would lose our investment of $1 million. The probability of failure is 10%.
- One percent of our products will fail, causing harm to the user with a liability of $10,000 per failure. We have sold 100,000 products.
What are the expected returns and range of returns in each of the scenarios below?
- A military coalition has offered to arm an external group if the group would ally with the coalition. Survey respondents forecast a 60% probability that the group would stay loyal to the coalition. The group currently consists of 1,000 unarmed people.
- The coalition must choose between two alternative acquisitions: an off-road vehicle that could avoid all roads and therefore all insurgent attacks on road traffic, which account for 40% of coalition casualties; or an armored vehicle that would protect all occupants from all insurgent attacks. However, experts estimate a 20% probability that the insurgents would acquire a weapon to which the armored vehicle would be as vulnerable as would any other vehicle.
- The police claim that an investment of $1 million would double their crime prevention rate. Another authority claims that an investment of $1 million in improvements to electricity generation would enable street lights at night, which would triple crime prevention. Experts estimate the probability of success as 60% in the case of the police project, 50% in the case of the electricity project.
Consider your answers to question 3. In each scenario, how could you describe one option or alternative as risk efficient?
Describe the risks in the scenarios in questions 2 and 3.
Categorize the risks in the scenarios in questions 2 and 3.
What is the difference between the normal formula of expected return and the PERT expected return?
What are the advantages and disadvantages of asking experts to assess risk’s level or rank?”