Risk management tools

Risk management tools help address uncertainty by identifying risks, generating metrics, setting parameters, prioritizing issues, developing responses, and tracking risks.^[1] Without the use of these tools, techniques, documentation, and information systems, it can be challenging to effectively monitor these activities.^[2][3]

There are two distinct types of risk tools identified by their approach: market-level tools using the capital asset pricing model (CAP-M) and component-level tools with probabilistic risk assessment (PRA). Market-level tools use market forces to make risk decisions between securities. Component-level tools use the functions of probability and impact of individual risks to make decisions between resource allocations.^{[citation needed]}

ISO/IEC 31010 (Risk assessment techniques) has a detailed but non-exhaustive list of tools and techniques available for assessing risk.^{[citation needed]}