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About this document
- Pages
- 7 pages
- Price
- $7 one-time, yours to keep
- Membership
- Included in every plan
- Format
- Subject
- Business, Finance
- Module
- Week 4 · Week 4
This document is a study guide for Week 4 of the BUS 650 Managerial Finance course. It introduces the concept of business risk and risk management, and discusses how to mitigate four types of business risk: property, market, employee, and customer.
What's inside
- Introduction to business risk and risk management
- Four types of business risk: property, market, employee, and customer
- Mitigation strategies for each type of risk
- Importance of risk management in maximizing business value
- Resources for predicting and minimizing risk exposure
Who it is for: For students of the BUS 650 Managerial Finance course. (Postgraduate)
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Summary
Business risk and management are introduced. Students learn about the four main types of business risk and how to mitigate them.
Four types of risk
Business risk is defined. Four categories of business risk are introduced. Students are asked to analyse how financial management techniques can mitigate each risk.
Systematic and unsystematic risk
Systematic risk affects all businesses in a market. Unsystematic risk affects individual businesses. Different strategies are suggested for managing each type of risk.
Mitigating property, market, employee and customer risks
Each type of risk is explained. Ways to reduce each type of risk are suggested. Students are asked to research risk mitigation techniques.
Key terms
- Business risk
- The chance that a business' cash flows are insufficient to cover operating expenses.
- Systematic risk
- The likelihood that an entire market or economy experiences a downturn.
- Unsystematic risk
- The likelihood that a particular business or industry fails.
- Risk mitigation
- Strategies for minimizing a business's exposure to risk.
- Asset allocation
- Distributing investments among different asset categories.
- Diversification
- Spreading investments across various industries and sectors.
Questions this document helps with
- What are the four main types of business risk?
- What is the difference between systematic and unsystematic risk?
- How can businesses mitigate their exposure to risk?
Summary written with AI from the document's text.
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