Enterprise risk management (ERM) should support managerial decision-making to increase firm performance and firm value. Although decisions are made every day, few people realize that decisions are fundamentally structured in terms of cost and benefits and risks and opportunities. These factors must be analyzed to understand how decisions are made and how they can be improved. The underlying structure is not always visible in risk decisions and risk models in practice, so it is important to be aware of it when individuals in organizations build risk models and make decisions under risk. Such decisions should consider expected values, risk attitudes, and risk diversification which are explained in this chapter.