Learning Communities Risky Business
What is Risk?
What is risk? Shall we take risks? How might we decide which risks are worth taking and which ones are reckless or just too risky? What determines our attitudes towards risk? Are there ways to manage or protect ourselves from the risks that are worth taking?
These are all interesting questions which arise in daily life as well as in all kinds of decisions about business, travel, medicine, relationships, sports and so on. In Western culture, risk taking is generally regarded as courageous and life-fulfilling. “You’ve got to jump off cliffs all the time and build your wings.” (Ray Bradbury) However, risk taking does not mean exposing yourself to danger. “Take calculated risks. That is quite different from being rash.” (General George S. Patton) "Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing." (Helen Keller)
About the Seminar
This integrative seminar gives students a broad overview of risk and offers them mind tools to better understand uncertainties. Risk touches on the most profound aspects of psychology, mathematics, statistics, and history. In order to assess risk – everything from the risk of an automobile accident to the uncertainty of some common medical screening tests – we need a basic understanding of statistics. Therefore the ideas of chance, rationality, and statistical thinking are introduced. The management of risk is quite different across different areas, for example, in healthcare, insurance, information systems, and finance, etc. We discuss some of these real world uncertainty cases using standard techniques of financial analysis and quantitative modeling as well as more intuitive approaches.
Trading is a particularly interesting area to the business students that requires risk management. The risk-taking aspect of trading is about taking deliberate action in the face of the uncertainty, unpredictability, and undetermined odds of the market. It requires staying with the hypotheses and discipline in a way that produces consistent results. Specific techniques for measuring and managing the risk of trading and investment positions will be discussed, with a particular emphasis on lessons to be learned from trading disasters.
The students benefit from this LC courses not only for their professional development, but also personal growth. It is our hope that participants in the LC will come to understand their own attitudes towards risk, to equip themselves with sensible ways to weigh and consider the risks of their personal decisions, and therefore to reach beyond their own comfort zones. We expect students to understand that, as Goethe put it, "the dangers of life are infinite, and among them is safety."
- “Whether we think about it often or not, nearly every decision we make has an element of risk. Fortunately for us, scholars have been thinking about risk for years and have developed many ways to deal with it. In this LC, I hope that we can raise consciousness about risks and share some of the standard approaches to this ubiquitous and dynamic issue.” -- Professor Robert Carver
- “What fascinates me about this course is that the concept of ‘risk’ does not only apply to finance and business, rather, it has broad implications in every aspect of our daily lives. I am excited to share my understanding and experiences with our curious students.” -- Professor Ginger Meng