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RISK MEASUREMENT

SUBMITTED TO:
MR. Adnan Bashir

SUBMITTED BY:
Khurram Javed Abdul Wahab Shama nureen 09041020-022 09041020-036 09041020-050

21 june, 2011

UNIVERSITY OF GUJRAT

High standard deviation indicates a high degree of risk. first we will have to analyze the types of risks. the presence of risk is there in every business due to several reasons e. Risk includes the possibility of losing some or all of the original investment. manufacturing. economic environment. and many other causes can be a basis to increase the chances of risk. unexpected future needs. Measurement of risk: Various methods are available to calculate the risk.RISK: The probability of that an investment’s actual return will be different than expected return. Following are risks which can adversely affect our business:      Management Risks Financial Risks Operational Risks Marketing Risks Intellectual Property Infringement . So to avoid or eliminate any type of risk regarding services business. or production etc. either it is business of services. CRITICAL RISK FACTORS: As we know that risk is involved in every field of life. Whatever the business nature is. Risk is usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment.g.

especially cash flow.o Management Risk: First and foremost risk is management risk. In this case when any of the management team members leaves the business he is not entitled to use the name of the company. the transactions our business makes and the financial systems we already have in place. If any partner of our business may want to start its own business. because management is key element of success of the business. but beyond these intellectual abilities we will have to hire a architecture and engineer as per consultancy services legal requirements. As all partners of our business are well qualified. so there would be high risk for our business success also for coming years.  Investment Risk: If we were failed to capture the market in the sense we have thought about to capture. Identifying financial risk involves examining our daily financial operations. In this risk we also realize that there may be any dispute in the management team due to any unexpected reasons which may result to terminate any of the members.  . loyal. He cannot start the same business with the same name. it will also be a risk for our business. Mode of Payment: While making agreement to provide services. honest then it will be beneficial for our business. mode of payment should be decided at the same time. so we may able to better perform our business. o Financial Risks: Financial risks are related with the financial structure of our business. it will result our initial investment lost. So in case of delay in payment for any cause we may able to recover our service charges. If management is committed.

water supply or other requirements regarding that particular project.These will be considered on the basis of quality we have served with. so client may not influence us after getting aware from other consultant.  Trademark Infringement Trademark is a symbol which is used by the most business. It is a major risk factor that can adversely effect our business.will lead toward good results. Following are the intellectual property infringement. In business there is a high risk of infringement of the business intellectual property. people and systems. we would first identify the major operational risk factors which can affect all remaining operations of our business and then making correction. Following are some major examples of Operational Risk:   Commitment should be written in order secure ourselves. .o Operational Risks: Operational risk is defined as the risk of loss resulting from insufficient or failed internal processes. Any one of your competitor may copy your business idea which causes your business to suffer. because if operations will be effective . There should be clearance of site e. or from external events. We use this technique for the purpose that our competitor cannot copy our business.g it could be in sense of ownership. So while starting a new business..  Copyright Infringement Copyright infringement means someone copy our business. o Intellectual Property Infringement: An intellectual property infringement is the breach or violation of an intellectual property right. To get rid from this risk we use copyright of catalogues. o Marketing Risks: Market risk is not much more influencing to our business as our business is generally based on references . It is a symbol which differentiates our business from the other one.

etc. draught and excessive rain fall can lead to loss. the risk that the project's output will not generate sufficient revenues to cover operating costs and to repay debt obligations. Building risks are the most common type of physical risk. Following risks includes in this category:  Breakdown of electricity circuit  Chance of burning  Loss of life or injury in case of short circuit. o Economic Environmental Risk In financing a project. laws. The risk to our business is prices fluctuations for which we may disable to earn the profit we have perceived.SOURCES OF RISKS: o Physical Environmental Risk The physical environmental is a fundamental source of risk which includes earthquake. The political risk regarding the interior business is as under:  Change in government will wear off our contracts with the previous government. such as taxes. o Political Environmental Risk The risk of loss when investing in a given country caused by changes in a country's political structure or policies. . Fire or explosions are the most common risk to a building.

otherwise we are unable to serve in this regard.  There should be a council of diploma holders also so they may protect their rights. and to minimize or to get rid from this type of risk. and potential legal proceedings.  Last but not the least the intellectual property infringement risk is avoided through the registration of trademark. we have to make that follow otherwise will lead to penalty. all provisions are mentioned in the partnership deed regarding the exit from business and from the employees part specific hiring criteria should be follow.html http://www. References: Interior Decor (Cantonment Plaza Sialkot Cantt) http://www. such as bankruptcy.  As for as the management risk is concerned.investorwords.com/5632/legal_risk. There is a legal limit regarding the space occupied. Recommendations For overall Risks: The recommendations to avoid the mentioned all above risks includes the following:  Council should be so strong that our business may not be influenced for the cause of political interferences.o Other Risks: The other risk regarding the business includes: Legal Risk: A description of the potential for loss arising from the uncertainty of legal proceedings.com/1646/economic_risk. Following are the risks regarding our business:   There is foremost and the initial requirement to start the business is acquisition of diploma.investorwords.html .  The operational risk of the business is the crucial one. there should be up to date record and internal control on daily activities.