# Risk Calculator

**Created By :** Vaibhavi Kumari

**Reviewed By :** Rajashekhar Valipishetty

**Last Updated :** Apr 03, 2023

Welcome to our Risk Calculator. This tool is helpful to determine the risk by measuring the loss connected with the occurrence of the disruption. You have to enter the probability of failure and loss details and press the calculate button to check the risk in a split of seconds.

### Risk Definition | Formula of Risk

Relative risk is defined as the ratio of the probability of the disease exposed and the probability of the risk unexposed. It can also be called the risk ratio. Risk can be calculated by measuring the expected loss connected to an object with the occurrence of the considered disruption. The risk formula is along the lines:

**Risk = probability * loss**

Where,

Probability is the probability of failure

Loss is the damage you have to bear in case of failure

### How to Find Risk ?

Here are the steps to calculate the risk in an easy process.

- Get the probability of loss and failure in case of loss values.
- Multiply the probability with the amount of damage occurred due to failure.
- This product is the risk value.

**Example:**Let us consider that you have invested in a company that is subjected to a disrupting event of probability of 0.6 with the related loss of $25000. Calculate the amount of risk?

Given that,

probability = 0.6

loss = 25000

Risk = probability * loss

= 0.6 * 25000

= 15000

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### Frequently Asked Question's on Risk Calculator

**1. How do you calculate risk?**

You have to know the probability of failure and the amount of damage created due to failure values. Multiply that loss and probability of failure to get the risk value.

**2. What is meant by risk?**

Risk is nothing but the prediction of expected loss by connecting with some value like investment etc.

**3. What is the formula to calculate the risk?**

The formula to calculate risk is Risk = Probability of failure * loss.