Risk and uncertainty
You'll learn the critical distinction between risk and uncertainty in financial decision-making, and how to apply practical tools like scenario planning, expected values, and decision trees to manage both.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Risk and uncertainty in finance
- 0:30 Defining risk versus uncertainty
- 1:29 Managing uncertainty with scenario planning
- 2:26 Expected values and probability assessment
- 3:07 Limitations of expected value approach
- 3:44 Decision trees for evaluating outcomes
- 5:21 Limitations of decision tree analysis
About this lesson
This session covers the SBL syllabus requirement to understand how risk affects business operations at strategic and operational levels, and equips you with frameworks to evaluate outcomes and make better decisions when information is incomplete. You'll see worked examples of decision trees and understand their limitations, preparing you to handle risk assessment questions in your exam with confidence.
Duration: 6m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the Strategic Business Leader course
All 101 video lessons, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in