Professional Documents
Culture Documents
By
Vinay
Introduction
Entrepreneurs are handle different risks
because they face a variety of risks while
carrying out their business operations.
Effective handling of risk ensures the
successful growth of an Entrepreneur /
organization.
Meaning
According to the ‘Oxford English
Dictionary’, risk refers to “The
possibility of something bad
happening or expose to danger or
loss”.
Types of Risks
Financial
Risk
Financial risk is normally any risk associated
with any form of financing. Risk is probability of
unfavorable condition; in financial sector it is the
probability of actual return being less than
expected return.
For example: non-payment by a customer or
increased interest charges on a business loan.
Credit risk
Inflation
Cost risk
Market
Risk
Market risk is the risk that the value of an
investment will decrease due to moves in market
factors. The four standard market risk factors
are:
Interest rate risk (the risk that interest rate will change)
Equity risk (the risk that stock prices will change)
Commodity risk (the risk that commodity prices (for e.g.
crude oil, copper, etc…) will change)
Currency risk (The risk that foreign exchange rate will
change)
Technology
Risk
It is th e p ro ce ss o f
m a n a g in g th e risks a sso cia te d
w ith im p le m e n ta tio n o f n e w
te ch n o lo g y in th e b u sin e ss.
Fo r e xa m p le : N e w Te ch n o lo g y
fa ilu re s in m a n u fa ctu re
d e p a rtm e n t.
Political & Economic
Risk
Less
Severe Risk retention Risk reduction
Loss
More
Severe Risk Transfer Risk Avoidance
Loss
Thank You
By ,
Vinay