Risk Avoidance and Risk Retention
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a. Discuss how risk avoidance might prove advantageous in your company or one with which you are familiar.
b. How do the concepts of risk retention and risk transfer apply to your company or one with which you are familiar.
c. Congratulations! You have just been promoted to the position of Supervisor of Risk Management for your department or one with which you are familiar. discuss 2 or 3 things you would do (include why you would do those things).
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Solution Summary
The expert discusses how risk avoidance might prove advantageous in a company. The concepts of risk retention and risk transfer are applied to the chosen company.
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a. Discuss how risk avoidance might prove advantageous in your company or one with which you are familiar.
Answer:
Risk avoidance can be defined as the company position to not engage itself in the risky project or operation. It is some time beneficial if the level of risk is higher and the company can not diversify it.
Risk that can be diversified should not be avoided but those risks like high level of uncertain risk over company project to give positive NPV can be avoided other wise this can add risk to the company operations rather than diversifying. As we know that the higher the risk, the higher return a company can get but if the risk is beyond the control of the ...
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
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