Corporate Governance and the risk taking

Risk is defined as the probability of occurrence of the danger or loss.

Chinese symbol have its meaning: 1: danger 2nd : opportunity to & danger

Risk management is not only meant to minimizing bad risk but it also provide opportunity to go for the
GOOD risk.( maximizing)

The risk oversight is the work of the board of the director however board of the director appoints the
risk committees to look ahead the risk
CAPM is a good measure to calculate the asset value or asset return.
The risk managers have to estimate the cost of hedging or cost of minimizing the risk
Slope of the regression is known as the beta
To calculate the beta: run the regression process on the stock

Tools that could help us to manage our risks:

Probabilistic approach:
Sensitivity analysis

Delineating efficient portfolio..

1) The portfolio whose lying above the minimum variance portfolio is known as the concave
2) The portfolio lying below the minimum variance portfolio is known as the convex
3) Lower the co-relation between stocks brings greater Diversification benefit.
4)