The probability of an event is associated with a measure of whether it will occur regardless of the actions of the company’s managers. It may be the result of a Monte Carlo risk simulation (in the case of measuring the VaR [Value at Risk] or other associated probability and confidence intervals) or it may be a subjective evaluation by those responsible for its management. Usually, experts have some sensitivity, based on their experience, about the chances of a risk event occurring. This value can then be the result of an analytical assessment or research and expert consensus.
An example of setting the levels of event probability can be established by the following table: