Is the inherently discriminatory nature of underwriting acce

Is the inherently discriminatory nature of underwriting acceptable from a public policy standpoint? Would shifting to a primarily behavior-based approach to risk assessment be feasible?

Solution

Risk Assessment :

Defination : The estimation of potential risks that are involved in a procedure to complete a undertaking project.

Challenges to Risk :

Reasons that cause Risks :

Strategy to Risk Management :

A behavioral Approach to Risk Management :

In this Approach the profitability of the shares depending on behavior of the market and the organization.Psychological Behavioral Baises can be stated as :

According to the Prospect Theory by Kahneman and Tversky :

The decision making process has 2 steps :

Editing Phase : Its the Preliminary investigation.Coding and Outcomes are treated as gains and losses with a reference point.Segregation of allthe risks involved, Classifying the risks and discarding the most common risks.

Evaluation Phase : Weights are mostly assigned to the probability and values are assigned to the outcomes.