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Financial and Enterprise Risk Management: Strategy

I have the following task, and I need some help getting started: Write a term paper, which must address theme within the context of a topic.

Theme: Risk Management
Topic: Analyze and evaluate the use of various strategies to manage financial risk or the application of enterprise risk management in an organizational context.

As a financial manager, discuss how to integrate the issue(s) into decision-making process. For example, would you use financial criteria exclusively? If so, which ones? If you would use non-financial criteria, which ones and how would you reconcile them with desired financial outcomes. Few managerial decisions have only a single solution. Also, there may be opportunity costs and risks that should be weighed.

Clearly state the issues that you are addressing and describe the organization(s) that are affected.
Where data are available, include a financial analysis that leads to your conclusion.
Where data are not available, describe in detail the type of analysis you would perform and the data needed to reach a conclusion.
Elect and defend the approach that seems most appropriate at this time. If you believe that there are evolving issues, state clearly what future actions you would recommend.

Be between 10 - 15 pages, plus appendices, exhibits, and references.
Include a one-page Executive Summary immediately following the title page that includes a statement of the major issue(s) and your specific recommendations. The content of an Executive Summary is similar to an abstract.
Properly cite reference sources (APA format): these may include course material, information from magazines, journals, and online sources. All reference sources must have a publication date no earlier than 2004.

Recommended Resources:

Yahoo: http://finance.yahoo.com;
Reuters (Yahoo will refer you here): http://www.reuters.com;
Edgar (SEC source of 10-K and other required financial reports; this is my saved "Favorite"): http://www.sec.gov/cgi-bin/srch-edgar; (EDGAR stands for Electronic Data Gathering and Retrieval)
Hoovers (general company information): http://www.hoovers.com;
Bloomberg (a good source of interest rate data): http://bloomberg.com/markets/rates/index.html;
Wall Street Journal free site: http://online.wsj.com/public/page/0,,2_0323,00.html;
Moody's (bond ratings): http://www.moodys.com;
Standard and Poors (bond ratings): http://www2.standardandpoors.com;
New York Stock Exchange: http://www.nyse.com/;
Bondpage (bond information): http://www.bondpage.com;
Federal Reserve (interest rates): http://www.federalreserve.gov/releases/h15/update/;
Vanguard bond site: http://flagship2.vanguard.com/VGApp/hnw/FundsBondsMarketSummaryTable; and
Bond Marketing Association (trade group) site: http://www.investingbonds.com

Solution Preview

Please find the file attached.

As you know, BrainMass is not an assignment-completion service. This response is meant to assist you in tackling your questions and to help you learn the material needed to understand the problems.

Thanks

Risk Management

Table of Content
1. Executive summary....................................................................................3
2. Introduction.............................................................................................4
3. Risk management .....................................................................................4
4. Enterprise risk management..........................................................................5
5. Risk management strategies..........................................................................6
6. Tools to measure risk.................................................................................7
7. Issues i operations.....................................................................................7
8. Managing the risk.....................................................................................9
9. Recommendations....................................................................................10
10. Tools of Risk management ........................................................................11
11. Conclusion............................................................................................12
12. References.............................................................................................14

Executive Summary
The paper discusses about the term risk and its relationship with certainty. It explains the meaning of risk management, its objective, enterprise risk management. Risk assessment is relatively new and rapidly developing science. Risk assessment is an important tool for decision-making for most the federal agencies. It is a subject of research which is established only within the last period of time. The paper discusses about the application of enterprise risk management. Corporate risk management refers to the process of a company managing its risk at an acceptable level (Crouhy, Galai & Mark, 2000). It is an ongoing process and the aim is to maintain the overall risk at desired level, at the minimum possible cost. The paper gives the idea about the risk management strategies which the companies should follow to avoid the risk.
The paper has discussed about the techniques to measure the risks. The paper has talked about the sensitivity analysis and probability as the tool to measure the risk. Sensitivity analysis takes into account a number of possible outcomes and returns estimates while evaluating the assets and assessing risk (Crouhy, Galai & Mark, 2000). In order to have a sense of the variability among returns estimates, a possible approach is to measure the worst, expected and the best. In probability, risk associated with asset can be assessed more accurately by the use of probability than sensitivity analysis.
The paper also discusses about the issues that the company faces in its operation. The risks which are faced by the company like exchange rate risk, liquidity risk, marketability risk, credit risk, etc. For all this, the data has been collected from the article and other sources. The information used is not based on financial criteria; there is use of non-financial criteria. On the basis of various historic reports, the desired financial outcomes have been carried out (Crouhy, Galai & Mark, 2000).
At the end, the paper gives the description about way to manage the risk and risk management process. The process explains the steps how the companies should mitigate the risk.
Introduction: Risk
The term risk and certainty are often used as interchangeable but there is a difference between two, certainty is a situation where it is known what will happen and the happening and not happening carries 100% probability. Risk is the situation when there are number of probable outcomes. The degree of risk in a particular situation is dependent on the level of information available with the entity of information facing the risk. The risk is the probability of something unpleasant happening or the chance of encountering the loss. Risk means uncertainty of future cash flows. The job of risk manager involves identification of nature of risk, remedial measures available for managing risk and cost of managing the risk. Thus, the risk manager has to select the alternatives after identifying the risk to be managed. His job involves ensuring that risk does not exceed the level desired by investor and shareholder. Risk management actually means risk deduction. Risk is imperative and the increase in the predictive ability also forms a part of risk management.
Risk Management
Risk management is a practice of selecting cost effective approaches for minimizing the effect of threat realization to the organization. Risks can never be fully avoided or mitigated because of the financial and practical limitations. Therefore, all organizations have to accept some level of residual risks (Charles, 2004).
The objective of risk management is to reduce the different risks related to a preselected area to the level by which it is accepted by society. It may refer to numerous types of threats caused by environment, technology, humans, organizations and politics. In contrast, it involves all means available for humans or in ...

Solution Summary

The response addresses the queries posted in 3276 Words, APA References.

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