Systematic Vs. Unsystematic Risk

In the world of business, there many different types of risks associated with each individual investment. Whether you are investing in the stock market or looking to implement a new business strategy, each type of risk must be individually evaluated and taken into consideration. Risk is unavoidable when staking claim in another company, but the payoff is often worth the risk. Here are different types of risk that should be analyzed before making any sort of investment or implementing a new strategy. There are two types of basic risks that have more specific elements. The two main types of risk are as follows: Systematic Risk – Influencing a large portion of the market, systematic risk involves events that can take many forms. Whether it is a […]

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Performing a Project Risk Assessment

Project risk assessment helps to outline the possible risks involved with any business decision. In the fast paced world of commerce, it’s important not only to be prepared for obstacles, but have ways to cope with unseen events. No matter what the project being implemented is, there will be foreseen and unforeseen risks involved. Because of the nature of investing and using new strategies, a way to quantify each individual risk is necessary. Using a risk management tool is not overly complicated, but there are a lot of aspects to creating a good assessment. One must not only look at the formal risks of an investment, but unexpected ones as well. Formal risks involve market trends, industry standards, and other elements that can be closely monitored. […]

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Looking at Finance, Risk Management, and More

Loosely defined, finance risk management puts aside a value for a firm or business based on the number of risks that the company has. Some of the risks involved with the process include market risk, credit risk, inflation, and other topics. With a similar approach to general risk management, finance risk management takes it a step further and more closely examines all of the aspects of a single company in order to determine which decisions the company should make. Unlike general risk management, the pinpointed area of finance risk management handles the finances and essentially handles the money within a certain company. In the world of business, there are countless risks that can occur. Some of these risks have benchmarks which allow for accurate predictions, while […]

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Other Types of Risk

We’ve covered systematic and unsystematic risks. Within these two types of risk, there are more specific elements. Most types of risk are associated with investing and are specifically broken down as follows: Credit Risk – A type of risk that computes the risk of a company or individual being unable to pay back loans or other debts. This is particularly useful for creditors and investors who have bonds as a part of their portfolio. Another area where credit risk is involved is the market of government bonds. Many different companies measure the credit risk of a company or an individual against the rate set by the bond market. Since bonds are issued by the U.S. government, they are backed by the government’s full faith and credit. […]

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Assessing Your Project Risks

The first major step to preparing a project risk assessment is to identify the potential threats associated with the project. Here are some examples: Human – The effect of individuals on the company. Risks in this department could include illness, death, and other personal matters that might hinder the project. Reputational – Fraud, loss of a business partner, damage to the market in general, breach of security, or any other event that might cause investors to lose faith in the market. Procedural – Pertaining to the way that the company is run. Some examples of this are failures in financing, mismanagement, and other bad business risks. Technical – Unstable or unreliable storage of data or faulty equipment. One of the main examples of this is the […]

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