The Redbird Risk Management Challenge is comprised of four quarters, each representing a 24 hour period that begins after lunch and closes before lunch on the following day. Your team is asked to forma a corporation that will operate is a risky environment – one in which potential losses will occur four times each quarter. The frequency of occurrence and the severity of a loss if it does occur, are based on probabilities – no one knows what will happen each quarter – not even the instructors.
You and your team members are asked to assume the role of the chief risk officer (CRO) for your corporation, essentially forming a management team that is charged with generating revenues and protecting the corporation’s assets. Your success will be based upon
1) your ability to correctly assess your risk environment
2) your ability to design a strategic and efficient risk management strategy
3) your ability to excel in revenue production opportunities and
4) luck. Because no matter how well you design your risk management strategies, the probabilistic nature of the risky environment will leave you with no guarantees. However, a solid risk management strategy gives you the best chance of thriving in this uncertain environment.