Risk Management
Created By: Cade Smith, Jamison Spann, and Abraham Steinbeck
Definition
Risk management occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action or inaction.
Risk Management
- 5-Step Process
- Important part of planning for business
- Occurs anytime an investor analyzes the potential for losses
Risk Financing Techniques
- Contractual non-insurance transfer
- Insurance transfer to a non-owned insurance company
- Borrowing of funds
Risk Control Techniques
- Reduction of Frequency of Loss
- Reduction of Severity of Loss
- Avoidance of activities which cause loss