Share
Explore BrainMass

Issue Of Risk And Risk Management

You plan to meet with her on her first day of work to discuss one of the foundational issues behind all financial decisions, regardless of whether an individual investor is involved, a small company, or a large diversified corporation; i.e. the issue of risk and risk management.

Discuss the following specific issues from both the perspectives of an individual investor (which some of your clients are) as well as the perspective of large companies and their CFO's (another group of your clients).

-In the world of finance, what is risk and why is important?
-How is transaction risk different from other types of risk and how is it measured?
-Which do you think is the most important to the CFO or an international company? Why?

Solution Preview

-In the world of finance, what is risk and why is important?
Risk is probability of having losses. Risk is important to understand as there is an important relationship between risk and return. Higher the risk, greater will be expected return. Moreover knowing and understanding risk will help in managing the business in a better manner.

-How is transaction risk ...

Solution Summary

Risk Issue Of Risk And Risk Management

$2.19