Discuss the techniques to manage risks, Financial Management

Assignment Help:

Q. Discuss the techniques to manage risks?

Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of the four major categories like avoidance, reduction, sharing and retention. Ideal use of these strategies may not be possible. Some of them may involve trade- offs that are not acceptable to the organization or person making the risk management decisions.

2. Risk avoidance - This includes not performing an activity that could carry a risk. Avoidance may seem the answer to all risks, but avoiding the risk also means losing out on the potential gain that accepting the risk may have allowed.

3. Risk reduction - Risk reduction or ‘Optimization" involves reducing the severity of the loss or the likelihood of the loss from occurring.

4. Risk sharing - Briefly defined as "sharing with another party the burden of loss or the benefit of gain, from a risk, and the measures to reduce risk.

5. Risk retention - Involving the accepting the losss, or benefit of gain, from a risk when it occurs. Risk retention is viable strategy for small risks where the cost of insuring against the risk would be greater over time than the total losses sustained.


Related Discussions:- Discuss the techniques to manage risks

What is commercial papers, Q. What is Commercial Papers? Commercial Pap...

Q. What is Commercial Papers? Commercial Papers: Commercial papers (CPs) are short-term, unsecured securities issued by highly creditworthy large companies. They are issued wit

Which formula would you use to solve for the payment, Which formula would y...

Which formula would you use to solve for the payment required for a car loan if you know the interest rate, length of the loan, and the borrowed amount?  Explain. To answer for

Accept-reject rule, Accept-Reject Rule: The decision rule is to accept ...

Accept-Reject Rule: The decision rule is to accept the project if the computed payback period is less than the standard.  If not, reject it.  While ranking the projects, projec

Preferred stock, Preferred Stock This is a category of capital stock th...

Preferred Stock This is a category of capital stock that will gives its holders preference  over common stockholders in the distribution  of earnings  or rights to the assets o

Add or Drop Analysis, Lakespring Retirement Village is home to senior citiz...

Lakespring Retirement Village is home to senior citizens who are fairly independent but need assistance with basic health care and occasional meals. Jill Thompson, a licensed beaut

Find out covariance between the two stocks, The stocks of Microsoft and Ap...

The stocks of Microsoft and Apple have a correlation coefficient of 0.6.  The variance of Microsoft stock is 0.4 and the variance of Apple stock is 0.3.  What is the covariance bet

What is the primary assumption behind experience approach, What is the prim...

What is the primary assumption behind the experience approach to forecasting? The experience act to forecasting is based on the assumption that things will happen a certain way

Rating symbols, Rating Symbol Capacity ...

Rating Symbol Capacity for Timely Repayment Rating Symbol Capacity for Timely Repay

Operating cycle, discuss the applicability of operating cycle to poultry bu...

discuss the applicability of operating cycle to poultry business(consider broilers)

Sally Thomson, Ask questionSally Thomson #Minimum 100 words accepted#

Ask questionSally Thomson #Minimum 100 words accepted#

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd