Question

The success or failure of risk management in the real world gives us reasonable grounds for risk management strategies. Find any two cases of risk management, summarize them, and draw lessons. The risk should be one of the risks we discussed in Week 1 – market risk, credit risk, operational risk, liquidity risk, and business risk. You can find the cases from risk management textbooks or news articles. You can also google some key words, such as “market risk management case study.”

Answer 1

Risk

life is full of risk for example risk is involved in simple things like turning on the gas at home or when dealing with life threatening medical emergencyc decisions. Risk plays an important role in the way we manage our economy, organization or our family. Risk can be rather complex when household money is involved; such as for indivuduals or familes. The types of risk involved influence decisions on how to mange or invest money in shares, bonds or property. When we faced with risks, the challege is how well prepared are we to overcocme risk. Successful business make constant effort to hange orupdate their in house administrative polices and frameworks to allow for possible risks in their business reuirements.

Yet managing risk is rather challenging for the world is mostly unpredictable. The process are cocntinousley changing and evolving in terms of resources that are availbel tecnology, innovation, human resources and time to name a few.

Risk assessment and management was estanlished as a scientific field some 30-40 years ago. Principles and methods were developed for how to conceptualise, assess and mange risk. Thesse priciples and methods still represent to a large extent the foundation of this field today, but many advances have been made, linked to bothe thetheoretical polatform and practical models and procedures.

Running a business comes with many types of risk. Some of theses potential hazards can destroy a business, while others can cause serous demage that costly and time consuming to repair. Despite theh risks implicit in doing business, CEOs and risk management officers can anticipate and prepare regardless of the size of their business,the ability to identify risks is a key part of strategic business planning. Risks are identified through a number of wsys. Strategies to identify theses risk rely on comprehensively analyzing a company's specific business activities. Most organizations face preventable, strategic and external threats that can be managed through acceptance, trasfer, reducton or eliminatio

Market Risk;-Market risk make up the two major categories of investment risk. The most common types of marekt risk include intrest rate risk, eqity risk, currency risk and commondity risk. commodity risk covers the changing prices of commodities such as crude oil and corn. currency risk.

Risk management cases

1. Prevention:-The best risk insurance is prevention.Preventing themany risks from occurring in yourbusiness is best achived through employee training, background checks, safety checks,equipment maintenance and maintenance of the physical premises. A single, accountable staff member with managerial authority should be appointed to handle risk management responsibilites. A risk management committee may also be formed with members assigned specific task with a requirement to report to the risk manager.

2 Detection:- involved identifying the points in a process where something couold go wrong, and then putting steps in plallce to fix the problems promptly if they ocur. detective actions include double chekcing financce reports, conducting safety testing before a product is released or installing senors to detect product defects.