@RISK Standard 5.7
Introduction
@RISK performs risk analysis using Monte Carlo simulation to show you many possible outcomes in your Microsoft Excel spreadsheet—and tells you how likely they are to occur. This means you can judge which risks to take and which ones to avoid, allowing for the best decision making under uncertainty. With @RISK, you can answer questions like, “What is the probability of profit exceeding $10 million?” or “What are the chances of losing money on this venture?”
Risk Analysis
Risk analysis can be performed qualitatively or quantitatively. Qualitative risk analysis generally involves assessing a situation by instinct or “gut feel,” and is characterized by statements like, “That seems too risky” or “We’ll probably get a good return on this.” Quantitative risk analysis attempts to assign numeric values to risks, either by using empirical data or by quantifying qualitative assessments. We will focus on quantitative risk analysis.
@RISK Shows You ALL Possible Outcomes
@RISK changes all that. @RISK lets you see all possible outcomes in your situation - and tells you how likely they are to occur! What this means for you -- the decision maker -- is that you finally have, if not perfect information, the most complete picture possible. You will see what could happen, how likely it is to happen, and therefore be able to judge accordingly which risks to take and which ones to avoid. While no software package can predict the future, @RISK can enable you to choose the best personal strategy based on the available information. That's not a bad guarantee!