Business World

Financial Risk Management

 

This concept of financial risk management enables a business to create wealth through the use of financial instruments while at the same minimizing risk. There are two major types of financial risks which are market risk and credit risk. Others include liquidity risk, foreign exchange risk, and inflation risk among others.You need to identify the source of risk, measure it, and proceed to address this risk at the initial stages of financial risk management. Thereafter in the specialized stages the need to know when and how to cushion yourself from price fluctuations through the financial instruments like insurances policies, future contracts among others is paramount