Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events.
Risk management is a two-step process – determining what risks exist in an investment and then handling those risks in a way best-suited to your investment objectives.
Risk management occurs everywhere in the financial world. It occurs when an investor buys low-risk government bonds over more risky corporate debt, when a fund manager hedges their currency exposure with currency derivatives and when a bank performs a credit check on an individual before issuing them a personal line of credit
Responsibilities for Risk Management Professionals can fall under different titles as follows:-
