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HBB 2403: Financial Risk Management Notes

Institution: Jomo Kenyatta University of Agriculture and Technology

Course: Bachelor of Commerce

Content Category: Lecture Notes

Posted By: PENTAMRK

Document Type: PDF

Number of Pages: 95

Price: KES 200
 
    

Views: 619     Downloads: 8

Summary

HBB 2403: Financial Risk Management Notes

LESSON 1
Financial risk management
By the end of the topic the student should able to:
• Know the risk process
• Identify risks
• The risk mitigation factors
• Hybrid securities
• Interest rates
1.1. Risk management process
Managing risks on projects is a process that includes risk assessment and a mitigation strategy for those risks. Risk assessment includes both the identification of
potential risk and the evaluation of the potential impact of the risk. A risk mitigation
plan is designed to eliminate or minimize the impact of the risk events—occurrences
that have a negative impact on the project. Identifying risk is both a creative and
a disciplined process. The creative process includes brainstorming sessions where
the team is asked to create a list of everything that could go wrong. All ideas are
welcome at this stage with the evaluation of the ideas coming later
1.1.1. Risk Identification
A more disciplined process involves using checklists of potential risks and evaluating the likelihood that those events might happen on the project. Some companies
and industries develop risk checklists based on experience from past projects. These
checklists can be helpful to the project manager and project team in identifying both
specific risks on the checklist and expanding the thinking of the team. The past experience of the project team, project experience within the company, and experts
in the industry can be valuable resources for identifying potential risk on a project.
Identifying the sources of risk by category is another method for exploring potential risk on a project. Some examples of categories for potential risks include the
following:
....


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