Consider the Disaster Risk Decision Tree Model

question 30

Essay

Consider the disaster risk decision tree model.
(a)Derive a formula to represent the amount that the probability of all suppliers being disrupted simultaneously,P(n),will increase if the super-event probability S is doubled.
(b)Test your formula by computing the amount of increase if the original S equals 1% and there are two suppliers,each with U = 4%.

---

Definitions:

Innocent Misrepresentation

A false statement made by one party to another, where the person making the statement genuinely believes it to be true.

Rescission

Rescission is a legal remedy that cancels a contract and returns the parties involved to their statuses prior to the contract, as if it never existed.

Rescission

The legal act of cancelling a contract and returning the parties involved to their positions prior to the agreement, as if the contract never existed.

Misrepresentation

The act of giving false or misleading information about a material fact in a transaction.