1.1 Links

In this textbook, the “Links” section in each chapter connects the specific topic of the chapter with the larger system of risk management. These diverse risks and the variety of techniques used to mitigate them are best understood as part of a holistic approach to risk management. Holistic riskThe entire spectrum of risk exposures. is the term used to describe the entire spectrum of risk exposures. Holistic risk management encompasses all risks, not just individual pieces. It is also a dynamic process. As economic, social, and technological changes generate new risks, they become part of the holistic risk. We can think of the many personal and business risks we face as puzzle pieces, which together form a complete global picture, as illustrated in Figure 1.1. As we progress through the text, each chapter begins with a “Links” section, discussing the connections between the personal or business risk addressed in that section and holistic risk management, highlighting the underlying relationships among different risks.