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1.Define put on the line and describe some of the major sources of risk. exposition of risk: the volatility unexpected outcomes which can represent the abide by of assets, equity or earnings. Mayor sources of risk: 1) Human created: occupation cycles, inflation, changes in government policies and wars. Example: The Asian crisis of 1997 is largely attributed to unsustainable stinting policies that weaken the fiscal sector. 2) Natural Phenomena: Weather and earthquakes 3) Technological innovations: risk of making existing technologies obsolete and creating dislocations in employment. Therefore, risk and the willingness to take hold risk are essential to the growth of our economy 2.Differentiate surrounded by business and financial risks and give examples of each. Business risks are those that the familiarity assumes willingly to create a competitive advantage and cast up to value for shareholders. Includes: Business decisions: investment decisions, product development choices, merchandising strategies, companys organizational structure (strategic risk) Business environment in which they operate: includes competition and macroeconomic risk. pecuniary risks cerebrate to the possible losses owing to the financial market activities.

For example, losses can occur as a result of touch on rate movements or defaults on financial obligations. Industrial Corporations vs Financial Institutions Industrial corporations should optimize their exposure to financial risk so that they can concentrate on what they do best tweak exposure to business risks. On the other hand, financial institutions gain as a primary function to manage financial risk actively. 3.Relate significant market events of the ult some(prenominal) decades to the growth of the risk management industry. Some events in the past have triggered the growth of the risk management industry. Some of the well-nigh important are: 1971: The fixed exchange rate scheme broke, leading to flexible and volatile exchange rates.... If you want to stick by a full essay, order it on our website: Orderessay

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