One known stands for the fact that the organization is aware that such a risk exists. Known knowns are the easiest type of risks when it comes to risk management. The details about these categories have been mentioned below: 1. After the 2008 crisis, this matrix has been routinely used to classify risks into four different categories. This framework is unique in the sense that it acknowledges that there are some risks that we cannot find out about no matter how diligent we are. The known unknown framework is a matrix that helps classify risks based on the knowledge that we have about them. In this article, we will understand how risks are classified in the known-unknown framework. Donald Rumsfeld just popularized the adoption of the concept to characterize and classify financial risks. It already existed in a lesser-known psychological construct called the Johari Window. It is important to realize that this framework was not created by Donald Rumsfeld. This framework classifies risks based on Knowns and Unknowns. One such framework was made popular by Donald Rumsfeld, who was Secretary of Defense for the United States during the subprime mortgage crisis. Different people use different frameworks. It is important to realize that there is no standard framework for classifying risks. Classification of risks is a vital step in this process. The entire subject of risk management is based on the ability of the manager to identify, value, and then mitigate the correct risks.
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