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Valuation and risk

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I have to answer the questions below in 250 words. I have been reading the chapter and don't fully understand these questions.

What is valuation? Why is valuation an important tool in risk management?

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The solution explains the relationship between valuation and risk management

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What is valuation? Why is valuation an important tool in risk management?

Valuation is the process of determining the value of any asset. The value of any asset is derived from the benefits associated with that asset. In general the value of an asset is the present value of the cash flows expected from the asset. Assets can also be valued using relative valuation, where ...

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