Earlier in this document, I provided the following definition for risk:

The probable frequency and probable magnitude of future loss

With this as a starting point, the first two obvious components of risk are loss frequency and loss magnitude. In FAIR, these are referred to as Loss Event Frequency (LEF) and Probable Loss Magnitude (PLM), respectively.

We’ll decompose the factors that drive loss event frequency first, and then examine the factors that drive loss magnitude.

Next: Loss Event Frequency

5 Responses to “Decomposing Risk”

  1. Possibilities Abound at RiskAnalys.is Says:

    [...] Under closer analysis, it looks like 2-3 of them are actually really that relevant as “vulnerabilities” and even then one wonders what the risk is to end users because of them.  As Matasano points out, this might just backfire on Klocwork – as now we know their software analysis tool is prone to over-reporting. [...]

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  3. Copywriting Says:

    What are copywriting classes like? I am thinking about minoring in copywriting at my school (I’m a fiction major) and I’d to know what sort of things are taught, what kinds of homework/practice/exercises there are, etc. Anybody here with experience?

  4. Kaden Hayes Says:

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  5. Bank Bully Says:

    Can this be utilized by somebody only needing to lose around ten pounds?

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