Calculating risk weight

The risk weight is specified as a value from 20 percent to 100 percent. Twenty percent represents the lowest weight for a risk, and 100 percent represents the highest.

You can set the value in 20 percent increments to 20, 40, 60, 80, or 100. The value of the weight is used as a multiplier for the risk value.

When risk values are used to compute the risk, weights are used to calculate the importance of a risk value. The risk is multiplied by the weight, and then added to the other risks multiplied by their weights. The calculated risk can be produced by the summation of each risk multiplied by its weight, and divided by the total weight of all risks.

 (Risk1 × Weight1 ) + (Risk2 × Weight2) + (Risk3 × Weight3)
------------------------------------------------------------ = Calculated Risk
                Weight1 + Weight2 + Weight3

For more information about how these risk weights are used, see Sample rating calculation.