Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
The Need for Risk Management

The Need for Risk Management

Ratings: (0)|Views: 1|Likes:
Published by MilyAries26

More info:

Published by: MilyAries26 on Oct 11, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less

10/11/2012

pdf

text

original

 
The Need for Risk Management
Corporations are in the business of managing risk.The risk should be monitored carefully because of their potential for damage.Types of risks facing corporations and that financial risks have increased sharply over thelast 30 years.The need to hedge against these risks had led to the exponential growth of derivativesmarkets.
Derivatives
1. are very efficient instruments to hedge against, or speculate on, financial risks.2. Without proper controls, however, they have the potential for creating large losses.3. They should be used only with good risk management.
VaR
Summary measure of market risk.
1.1 Financial RisksRisk
The volatility of unexpected outcomes:1. Value of assets2. Equity3. Earnings
Types: 
1.
Business
:
corporation assumes willingly to:1. create a
competitive advantage 
and2. add to
value for shareholders 
  judicious exposure to business risk is a core competency of all businessactivity.includes:1.
business decisions 
a. investment decisionsb. product-development choicesc. marketing strategiesd. company´s organizational structure

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->