About This Chapter
Financial Risk Management & Mitigation - Chapter Summary
Studying the basics of financial risk management and mitigation is fun and simple with help from this engaging chapter. Our instructors have developed short lessons you can study at your own pace to gain greater insight into risk assessment, swap contracts, differences between risk avoidance and risk mitigation and ways to manage risk. Gauge your comprehension of important lesson concepts by taking multiple-choice quizzes. Any questions you develop during your studies can be submitted to our experts via the Dashboard. These study resources are available 24/7 using any computer, smartphone or tablet. When finished with this chapter, you will be able to do the following:
- Showcase an understanding of insurance policies and risk management
- Provide descriptions of insurance coverage for various types of risk
- Share examples of the agency problem in finance
- List and discuss methods for responding to risk as it happens
- Identify and discuss different types of financial risk
- Differentiate between risk control and risk management
- Describe the agile approach to risk management
- Detail risk management strategies and discuss risk and return in insurance
1. Understanding Insurance Policies and Risk Management
Obtaining insurance is one of the most common methods of risk management. In this lesson, you'll learn about insurance policies and some key concepts related to insurance. You'll also have a chance to take a short quiz.
2. Insurance Coverage for Various Types of Risk
Businesses operate in a world of risk. One of the best ways to manage risk is through insurance. In this lesson, you'll learn about the types of insurance coverage available to businesses to help them manage their risks.
3. What Is a Risk Assessment? - Process, Methods & Examples
What is a risk assessment, and why would we prepare one? In this lesson, we'll learn what it is, why it's needed, and how to prepare a risk assessment and rank potential risks for our business.
4. What is a Swap Contract? - Definition & Examples
This lesson describes and explains the mechanics of interest rate swaps and other swap contracts. You'll also learn how swaps are used by borrowers and investors to reduce risk, add risk, or exchange one type of risk exposure for another.
5. The Agency Problem in Finance: Definition & Examples
The agency problem can be a really big issue in the finance world. Find out what an agency problem is and look at some real-world examples. Then, test yourself on your new knowledge.
6. Risk Avoidance vs. Risk Mitigation
As a project manager, you cannot ignore project risk and have to choose an effective strategy for dealing with each risk. In this lesson, we compare two risk response strategies: risk avoidance and risk mitigation.
7. Methods for Responding to Risk as it Happens
Risk is something we all encounter, just ask the insurance industry. Project managers have effective methods they use to manage risk. In this lesson, we will discuss several of these methods.
8. Financial Risk: Types, Examples & Management Methods
In this lesson, you will explore the various types of risks faced by a business and understand how financial risk is different from other types of risks. Then, you will learn about the different types of financial risks and methods to manage them.
9. Ways to Manage Risk: Insurable and Uninsurable Risk
Risks abound in life and in business. However, most risks can be managed. In this lesson, you'll learn about ways to manage risks. You'll also learn the difference between insurable and uninsurable risks. A short quiz follows.
10. Risk Control vs. Risk Management
In this lesson, we will clarify the difference between risk management and risk control. We will also describe a five step process commonly used in risk management. In addition, we will highlight four basic categories of risk controls.
11. The Agile Approach to Risk Management
In this lesson we will review the basics of Agile project management and then explore how the Agile process itself efficiently addresses risk management.
12. Risk and Return in Insurance & Risk Management Strategies
In this lesson, we'll define risk and return as it relates to the insurance industry, and you'll understand the correlation between the two. We'll also explore three risk management strategies and give examples of each.
Earning College Credit
Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the Finance 303: Financial Institutions & Markets course
- Foundations of Finance & Investment
- The Federal Reserve System & Financial Institutions
- Interest Rates, Rate Changes, & Risk Structure
- Understanding Financial Markets
- Basics of Financial Investments
- Equity Ownership & Risk Exposure
- Calculating Prices & Yields
- Principles of Financial Statement Analysis
- Financial Regulation & Ethics