Risk Measurement Techniques Paper

Risk Measurement Techniques Paper - Risk Measurement...

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Risk Measurement Techniques Risk Measurement Techniques Paper CORPORATE RISK MANAGEMENT FIN/415 September 15, 2008 Introduction 1
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There are many different types of risk in today’s business environment. These risks come from a wide variety of different sources. An effective management team should be able to identify the different types of risks which face a firm and in addition have an idea as to what the possible impact of these risks is for the firm. As there are many different sources of risk each with their own causes, defenses, and probabilities of coming to bear, there are many different techniques to analyze the risks that face a firm. These techniques fall into three main categories, qualitative, quantitative and country risk analysis. Each of these main categories is comprised of several individual techniques to analyze the risks firms face. Overview of Risk Analysis Categories The management of a firm should have a firm grasp on the different risks that face a business and what kind of negative effects could come from a poor risk experience. As risks come in all shapes and sizes there is no one technique that works to perfectly identify and analyze all risks perfectly. Due to this unfortunate reality there are a number of different techniques that a firm’s management can use to analyze the different risks that are inherent in the marketplace. These techniques fall into the three major categories of qualitative, quantitative, and country risk analysis techniques. Each of these categories has many different individual techniques to detect and analyze risks. The technique or techniques that management would use in each individual situation depends on a number of factors. According to Merna and Al-Thani, these factors include the availability of resources for analysis, the purpose of the analysis, the size and complexity of the issue, 2
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This note was uploaded on 08/17/2011 for the course BUS 200 taught by Professor Torres during the Spring '11 term at University of Phoenix.

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Risk Measurement Techniques Paper - Risk Measurement...

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