What is Risk Management?<\/strong><\/em><\/p>\nRisk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions. Essentially, risk management occurs any time an investor or\u00a0fund manager\u00a0analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given his\u00a0investment objectives\u00a0and\u00a0risk tolerance.
\nMany companies now allocate large amounts of money and time in developing a risk management framework to help manage risks associated with their business and investment dealings<\/p>\n
Goal of Risk management framework includes the following:<\/strong><\/p>\na. Ensure an institution\u2019s trading, credit extension, and operational activities do not expose it to losses that could threaten the existence and ROI’s of the company<\/p>\n
b. Risks cannot be avoided but one key objective of Risk Management is to ensure that the risks taken are consistent with the strategic risk tolerances set by senior management and the Board of Directors<\/p>\n
Refernce: Investopedia.com<\/p>\n","protected":false},"excerpt":{"rendered":"
What is Risk? Risk is the chance that an investment\u2019s actual return will be\u00a0different\u00a0than expected. This includes the possibility of losing some or all of the original investment. What is Risk Management? Risk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions. Essentially, risk management occurs any time an investor or\u00a0fund manager\u00a0analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given his\u00a0investment objectives\u00a0and\u00a0risk tolerance. Many companies now allocate large amounts of money and time in developing a risk management framework to help manage risks associated with their business and investment dealings Goal of Risk management framework includes the following: a. Ensure an institution\u2019s trading, credit extension, and operational activities do not expose it to losses that could threaten the existence and ROI’s of the company b. Risks cannot be avoided but one key objective of Risk Management is to ensure that the risks taken are consistent with the strategic risk tolerances set by senior management and the Board of Directors Refernce: Investopedia.com<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-6823","post","type-post","status-publish","format-standard","hentry","category-data-analytics"],"yoast_head":"\n
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What is Risk?<\/strong><\/em>