Risk Management

Process of identification, analysis and acceptance or justification of uncertainty in investment decisions is called Risk Management in financial world. Essentially, need of risk management arises when an investor or fund manager analyzes and attempts to measure the potential for losses in an investment and then takes the appropriate action (or inaction) given his investment objectives and risk tolerance.

Risk management occurs everywhere connected with financial world. Stockbrokers use financial instruments like options and futures, and managers of money use strategies like portfolio / investment diversification to navigate or effectively manage risk. Inadequate risk management can result in severe costs for companies, individuals, and for the economy itself.

Risk is strongly connected with return and its almost inseparable. Every investment involves some degree of risk that can be very close to zero or very high. Risk is measurable both in absolute and in relative terms. A solid understanding of risk in its different forms can help investors or money managers to better understand the opportunities, trade-offs, and costs involved with different investment approaches.

Process of identification, analysis and acceptance or justification of uncertainty in investment decisions is called Risk Management in financial world. Essentially, need of risk management arises when an investor or fund manager analyzes and attempts to measure the potential for losses in an investment and then takes the appropriate action (or inaction) given his investment objectives and risk tolerance.

Risk management occurs everywhere connected with financial world. Stockbrokers use financial instruments like options and futures, and managers of money use strategies like portfolio / investment diversification to navigate or effectively manage risk. Inadequate risk management can result in severe costs for companies, individuals, and for the economy itself.

Risk is strongly connected with return and its almost inseparable. Every investment involves some degree of risk that can be very close to zero or very high. Risk is measurable both in absolute and in relative terms. A solid understanding of risk in its different forms can help investors or money managers to better understand the opportunities, trade-offs, and costs involved with different investment approaches.