What is financial risk management?
Financial risk management involves identifying, analyzing, and mitigating risks that could impact an organization's financial health.
What are the main types of financial risks?
The main types of financial risks include market risk, credit risk, liquidity risk, and operational risk.
How can companies mitigate these risks?
Companies can mitigate risks through diversification, hedging, insurance, and implementing robust internal controls.
What tools are commonly used in financial risk management?
Common tools include Value at Risk (VaR), stress testing, scenario analysis, and risk assessment software.
Can you give an example of a financial risk management strategy?
Sure! A common strategy is hedging, where a company uses financial instruments to offset potential losses in investments.
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