Risk management is one of the key functions of corporate finance
Part B: Essay
Students are supposed to write a formal essay under the topic given below.
Risk management is one of the key functions of corporate finance.
Identify the systematic and unsystematic risk factors if you are a public company that is investing in consumer electronic business and what are the possible strategies to diversify the overall risk exposure of the company.
Assessment Criteria:
Demonstrated knowledge of identifying main systematic and unsystematic risk factors of a public consumer electronics company.
Demonstrate knowledge of identifying possible risk diversification strategies for a public consumer electronics company.
Logical inferences are drawn from information presented and appropriate justification of stance taken.
The overall presentation of the argument is relevant and appropriate.
Hint
Accounts & Finance "Risk management is the process of identifying, monitoring and managing potential risks in order to minimize the negative impact they might have on an organization. An effective risk management process also helps identify which risks pose the biggest threat to an organization and provides the guidelines for handling them.It consists of three parts: - risk assessmen...
"Risk management is the process of identifying, monitoring and managing potential risks in order to minimize the negative impact they might have on an organization. An effective risk management process also helps identify which risks pose the biggest threat to an organization and provides the guidelines for handling them.
It consists of three parts:
- risk assessment and analysis,
- risk evaluation, and
- risk treatment.
1. Risk assessment & analysis:
It evaluates an organization's exposure to uncertain events that could impact its day-to-day operations and estimates the damage those events could have on an organization's revenue and reputation.
2. Risk evaluation:
This step then compares estimated risks against risk criteria that the organization has already established. It include associated costs and benefits, legal requirements and system malfunctions, and socio-economic factors.
3. Risk treatment & response:
It is the implementation of policies and procedures that helps avoid or minimize risks and also extends to risk transfer and risk financing."
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