Risk Management Essay -- Investment Business Risk

What is risk?Simply put, risk is uncertainty. The more risk you take, the more you carry to lose or gain. You cannot expect high returns without taking substantial risks. Tossing a dice, is at basic level a risky endeavor. The outcomes are thrown exculpated to uncertainty. You take risk everytime you act, from crossing the street to buying a stock. Generally when people talk about risk, they focus on financial risk. In scathe of finance, it is the risk that a company or individual could lose some or all of the original investment, possibly resulting in inadequate cash lead to meet financial obligations. The concept of risk is not a simple concept in finance. You cannot make wise investments without first considering risk. To be successful, every investor mustiness be able to hear an d understand the types of risk they face across their entire portfolio. Measuring risk is just as important as touchstone returns. In the financial world, risk is often expressed as volatility of returns. Volatility measures how variable outcomes are likely to be. Standard deviation is a habitual statistical measure of volatility. It measures historical variability of returns from their mean. A higher standard deviation implies more variable and uncertain returns. Measuring risk on a portfolio basis shows how well diversified your investments are, where the largest gains and losses are likely to be conc... ...my is in recession, and on what grounds? What actually constitutes a recession, anyway? When a nations frugality enters a recession, is life guaranteed to get harder for most of its citizens? (http//www.howstuffworks.co m/recession.htm)How do you know when youre taking too much risk? Or not enough? Risk is a natural part of this world, and indeed, risk can present great opportunities for those who understand and know how to manage it. Advances in risk management theory have had a tremendous impact on global economic development. Now we have powerful ways to analyze risks and make stable decisions about the future. We can identify and measure different types of risk, and decide which ones to take and which ones to avoid.