About This Chapter
Identifying Financial Risk - Chapter Summary
In risk management, it's important to be able to identify potential financial risks. This chapter offers a handful of engaging and informative lessons that discuss methods for identify financial risks. Progress through the chapter to study the applications of risk modeling, risk profiling, risk maps and the risk assessment matrix. To make sure you understand these concepts, we've included lesson quizzes and a chapter exam. You can revisit the lessons as many times as needed, and the Ask the Expert feature lets you submit any questions you may have about these financial risk topics. The chapter is also available to study any time that fits your schedule. When you're finished with the chapter's resources, you should be able to:
- Define the concepts of risk modeling and risk profiling
- Create risk maps
- Recognize the functions of the risk assessment matrix
- Discuss risk management plans, tools and strategies that are used for the Olympics
1. Risk Profiling in Risk Management: Definition & Examples
In this lesson, we'll define risk profiling. Then we'll explain three components of risk profiling: risk tolerance, risk required, and risk capacity. You'll also learn how these concepts impact individual and corporate investors.
2. Risk Assessment Matrix: Definition & Examples
A risk assessment matrix i is a project management tool that helps determine which risks to the project warrant preparation of a response plan. The purpose of this lesson is to help you understand the risk assessment matrix and to provide examples.
3. How to Create a Risk Map
Organizations face many risks and must decide where to focus their mitigation resources. In this lesson, we'll discuss how a risk map can help present these risks in an easy-to-understand way.
4. Quantification of Uncertainty via Probability Models
Probabilities are used to quantify uncertainty. Here we will look at two uncertain situations - rolling dice and a business decision - and see how probabilities quantify uncertainty, as well as how they provide a useful tool for business.
5. Business Case Study: Risk Management at the Olympics
The Olympic Games are a challenge in project management that presents literally hundreds of risks that must be dealt with. Let's look at how business-style risk management has been incorporated into the Games with real examples from recent Games.
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