- The value of risk (VOR) is the financial benefit that a risky activity will bring to the organization’s stakeholders.
- Any activity a company can undertake, from entering a new market to developing a new product, involves risk.
- How much depends on the type of activity and the likelihood that the company will not be able to recoup the costs.
- Cost of Risk (VOR) requires a company to examine the various components of the cost of risk and consider them as an investment option.
- These calculations are only as good as the data and assumptions.