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Forum Home > Finance > what is RISK MANAGEMENT?

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30 December 2009, 14:24   Report Abuse



[ Scorecard : 33]

RISK arises when the actual amout of occurnce is deviated from the Exact amount.

we can not eliminate the risk, only way to control and minimize it.

we are having the basic needs of Food, Cloth and Shelter. But now a days the 4th need is coming into the picture that is PLANNING. we have to do the planning for the preservation of the those basic needs.

some risks, which effects the entire market is called the Systemetic risk and we can not avoid this risk. for example, like wars, interest rates, and recession etc.

But some risks we can avoid by the proper planning called Divesification, that risk is called Unsystematic risk. for example, the news effects one perticular compnanies stock etc.

and the risk management is controlable by,

   pooling of losses, risk transfer .



Message thanked : 2 times

30 December 2009, 21:02  



[ Scorecard : 77]

Every business activity has some inherent risks. If you buy goods which remains unsold; the risk of  slow moving either due to low  demand or outdated fashion. 

If sold; the risk of recovery from debtors.

If investment is made in machines, the risk of obsolscence. 

If pure investment is made risk of "recovery" of capital due to economic conditions and so on.

There should be a perfect match between risks and rewards. 

It is true we cannot stop the risks but we can control it.

Controlling is possible only when all the possible areas of risks are properly viewed.


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21 July 2015, 12:40  


[ Scorecard : 24]


Risk management is the identification, assessment, and prioritization of risks  followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risk management’s objective is to assure uncertanity does not deflect the endeavor from the business goals.


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