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Running head: EXPLANATION TO THE NON- TECHNICAL DECISION

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EXPLANATION TO THE NON- TECHNICAL DECISION 2

The explanation of the non- technical decision

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The efficient frontier analysis refers to a portfolio analysis concept that is designed to compare and return for investment vs risk assessment. For efficient frontier analysis, financial analysis is very important and a key to the analysis. It represents the highest level of the portfolio returns for any given risk. The application can be applied to financial instruments and physical assets. The efficient frontier analysis brings out a relationship between risk assessment and returns associated with the investment.

Explaining to a non-technical decision maker the result of the efficient frontier analysis on strategic risk management. There are several limitations touching on the empty string finite automata, which are a model referred to as (EFAs model). This can be explained from the hypothesis since it commences via the hypothesis in the application of the model (Wong-Parodi & Small, 2019). It touches on the assumption that renders the model unfit, especially in the real-time aspects. When dealing with the hypothesis that is present in the model, one must include the investor's inability to affect the market price, which is an assumption, and the investors are likely to bypass the risk if they want to. This is how I would explain the result of the analysis to the decision-makers who are non-technical.

My recommendation regarding risk analysis will revolve around the business plan. Risk analysis should always be in line with the adjusted business plan. Touch on the risk analysis policies, business growth, schemes in payments and capital planning in a business (Peterson, 2012). I would recommend the use of effective and efficient risk analysis that should adequately table a general framework and the measures that are equivalent to the financial system of the senior administration. The board and the senior management must communicate, be able to interpret and allow evaluation of the forms of risks that can be readily accepted.

References

Peterson, S. (2012).  Investment theory and risk management. John Wiley & Sons.

Wong-Parodi, G., & Small, M. J. (2019). A decision-centred method to evaluate natural hazards decision aids by interdisciplinary research teams. Risk Analysis. doi:10.1111/risa.13261