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Residual risk

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This is an old revision of this page, as edited by Omc (talk | contribs) at 22:50, 7 December 2015 (Under "See also," the definition of residual risk is not correct. But we don't need a definition here, and I've deleted it.). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

The residual risk is the risk or danger of an action or an event, a method or a (technical) process that, although being abreast with science, still conceives these dangers, even if all theoretically possible safety measures would be applied (scientifically conceivable measures).

The formula to calculate residual risk is (inherent risk) x (control risk) where inherent risk is (threats × vulnerability).

In the economic context, residual means “the quantity left over at the end of a process; a remainder” (dictionary.com).

In the property rights model it is the shareholder that holds the residual risk and therefore the residual profit.

See also