A       B       C       D       E A Assumptions list: this is a key part of the risk register which lists the assumptions, both explicit and implicit, on which the RAMP analysis is based. It is updated as and when previous assumptions need to be modified or new assumptions have to be made. Top B Baseline: the set of assumptions and methods which are used as the basis for the evaluation of risk in a project and its subsequent management. Risk analysis is impossible without a baseline which would, for example, include information on the objectives of the project, values of key financial parameters like discount rates, assumed levels of cash flows, financial model adopted, etc. Brainstorming session: an intense and focused scrutiny of an issue with the aim of covering it as comprehensively as possible and, in particular, identifying and discussing risks which might not otherwise be considered in the absence of such an intellectually charged and spontaneous environment. A brainstorming session should normally be led by a ‘facilitator’ whose task is to encourage suggestions, avoid criticism, and generally create an atmosphere in which participants are motivated to put forward as many relevant ideas as possible. A useful technique is to divide the session into two phases. The first phase consists of the generation of ideas where participants put forward ideas but no discussion is permitted (except for clarification) and the ideas are listed on a flip-chart by the facilitator. The second phase of the session consists of constructive discussion of the listed ideas to identify those that deserve to be explored further. Top C Client: the party (or parties) sponsoring the project. Top D Discount rate: the rate of interest which is used to discount earnings arising in the future to their present-day value. It is necessary to do this because, with positive interest rates, a sum of money which is invested will increase in value over time. Hence, the present value of money is less than its value in the future. The size of the discount rate will affect the appraised viability of those projects to which it is applied: broadly, the higher the discount rate the lower will be the present value of earnings (or benefits) arising in the future and the greater the negative impacts on project feasibility. The discount rate is determined pragmatically by the sponsor. Ideally it should take account of the sponsor’s cost of capital, the rate of inflation, interest rates and rates of return on investments throughout the economy. There is a difference between ‘real’ discount rates and ‘nominal’ discount rates. Real discount rates are used in conjunction with cash flows which are expressed in terms of present-day money values, with no allowance for price inflation. (The cash flows should, however, allow for increments in future over and above price inflation, e.g. real wage increases.) Nominal discount rates, on the other hand, are higher than real discount rates and are applied to cash flows which make specific allowance for future price inflation at an estimated rate. Top E Expected value: This measures the overall impact of a risk and is calculated by multiplying the impact of an event with its associated probability of occurrence. It is equivalent to the average impact of the risk event which would result if we were to carry out a large number of identical projects. Top