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Define: The Concept of Risk Management

Discuss the concept of risk management, both in general (as it relates to you in your personal life) and relative to a business venture.

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Risk Management is the process of measuring, or assessing risk and developing strategies to manage it. Strategies include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk. Traditional risk management focuses on risks stemming from physical or legal causes (e.g. natural disasters or fires, accidents, death, and lawsuits). Financial risk management, on the other hand, focuses on risks that can be managed using traded financial instruments. Regardless of the type of risk ...

Solution Summary

In 340 words this solution provides a discussion on the concept of risk management in relation to both personal experience endeavors and business. Multiple examples of methods to mitigate these risks in both an individual's personal life and in a business venture are detailed.