Mahatma Education Society’s

Pillai College of Arts, Commerce & Science ( Autonomous)

New Panvel

SUB: RISK MANAGEMENT

UNIT 1: Introduction, Risk Measurement

and Control
 Mahatma Education Society’s
Pillai College of Arts, Commerce & Science ( Autonomous)
New Panvel

Chapter 1: Introduction to Risk Management

Define Risk:
Risk is the chance of loss or the variability of returns or uncertainty associated with a given asset
Return is the total gain or loss expected - or experienced - by the owner of a financial asset or
investment over a given period of time. Returns are of two types:
¨ Receipt of the promised coupon and principal payments on the scheduled dates.
¨ Potential capital gains or losses on the sale of the bond prior to maturity.
Higher Risks = Higher Yields.
 Mahatma Education Society’s
Pillai College of Arts, Commerce & Science ( Autonomous)
New Panvel

Define Risk Management :

risk management is the process of identification, analysis and acceptance or mitigation of
uncertainty in investment decisions.

https://www.investopedia.com/terms/r/riskmanagement.asp
 Mahatma Education Society’s
Pillai College of Arts, Commerce & Science ( Autonomous)
New Panvel

RISK MANAGEMENT PROCESS

 Mahatma Education Society’s
Pillai College of Arts, Commerce & Science ( Autonomous)
New Panvel

TYPES OF RISK