I work in finance but do not have any formal education in the subject (I do have a PhD, but not in finance). I've picked up a lot of the jargon but there's one thing that I haven't figured out, and it seems too basic to ask. Hence I ask here.
What do people mean when they say they are "modeling risk" or "risk numbers?" The term "risk" here seems to have a very specific meaning, and it doesn't seem to coincide with the way the word is used in everyday speech. I'm not sure if it has anything to do with the risk-neutral measure, which is something I do understand.