Question

In: Operations Management

we are discussing two major types of risks, financial and political. Which of these do you...

we are discussing two major types of risks, financial and political. Which of these do you feel is the most threatening to a company? Why? Do you think that insurance can compensate for both types of risks equally?

Solutions

Expert Solution

Explanations:  

Financial risk is the major risk than political risk, company cannot solve the cash crunch or financial problem instantly. Political risks are same for every company but financial risks differ according to company size and capacity of arranging capital for their daily operations.

No insurance can compensate financial or political risk as political situation can change easily and pose a greater risk to company same way financial risk can change without any notice and can create great burden on company and certain financial risks are not covered in insurance so that you cannot xompensate it.


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