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- Title
Myths in Risk and Insurance: Maximum Risk Is at 50% Chance of Loss.
- Authors
Hedges, Bob A.
- Abstract
This article examines the myths in risk and insurance in the U.S. The concept of possible accidental loss can be modeled simply and directly in probability. But even if variance or standard deviation is the proper index for risk, risk is at maximum when probability of loss one-half does not necessarily follow. Intuition does not generally support the view that movement of probability of loss upward away from zero and movement downward away from one both represent the same change away from sureness toward increased risk.
- Subjects
UNITED States; RISK; INSURANCE; PROBABILITY theory; STANDARD deviations; ANALYSIS of variance
- Publication
Journal of Risk & Insurance, 1978, Vol 45, Issue 4, p699
- ISSN
0022-4367
- Publication type
Article
- DOI
10.2307/252255