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Risk Analysis
What is Risk <ul><li>The dictionary meaning of risk is the possibility of loss or injury; In risk, the probable outcome of...
Types Of Risk Risk Systematic Risk Unsystematic Risk <ul><li>Market Risk </li></ul><ul><li>Interest Rate Risk </li></ul><u...
Minimizing Risk Exposure
Market Risk Protection <ul><li>The Investor has to study the price behavior of the stock. </li></ul><ul><li>The investor h...
Protection against Interest Rate Risk <ul><li>To hold the investment up to maturity. </li></ul><ul><li>The Investor can al...
Protection against Inflation <ul><li>The bonds with fixed return can solve the problem. </li></ul><ul><li>Another way to a...
Protection against buis & fin risk <ul><li>To analyze the strength & weakness of the industry. </li></ul><ul><li>Analyzing...
 
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R&R

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Published in: Economy & Finance, Business
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R&R

  1. 1. Risk Analysis
  2. 2. What is Risk <ul><li>The dictionary meaning of risk is the possibility of loss or injury; In risk, the probable outcome of all possible outcome are listed. Once the events are listed subjectively, the derived probabilities can be assigned to all the possible events. Risk consist of two components Systematic & Un-systematic risk. </li></ul>
  3. 3. Types Of Risk Risk Systematic Risk Unsystematic Risk <ul><li>Market Risk </li></ul><ul><li>Interest Rate Risk </li></ul><ul><li>Purchasing Power Risk </li></ul><ul><li>Financial Risk </li></ul><ul><li>Business Risk </li></ul>Internal External Fluc in Sales R&D Personnel Mgmt Fixed Cost Single Prod <ul><li>Political Risk </li></ul><ul><li>Social & Regu Fac </li></ul><ul><li>Business Cycle </li></ul>
  4. 4. Minimizing Risk Exposure
  5. 5. Market Risk Protection <ul><li>The Investor has to study the price behavior of the stock. </li></ul><ul><li>The investor has to gauge the standard deviation & beta of a particular stock. </li></ul><ul><li>Further the investor should prepare to hold the stock for period of time </li></ul>
  6. 6. Protection against Interest Rate Risk <ul><li>To hold the investment up to maturity. </li></ul><ul><li>The Investor can also buy treasury bills & bonds of short maturity. </li></ul><ul><li>To invest in bonds with different maturity date. </li></ul>
  7. 7. Protection against Inflation <ul><li>The bonds with fixed return can solve the problem. </li></ul><ul><li>Another way to avoid risk is to make an investment in short term securities. </li></ul><ul><li>Investment diversification can also solve this problem. </li></ul>
  8. 8. Protection against buis & fin risk <ul><li>To analyze the strength & weakness of the industry. </li></ul><ul><li>Analyzing the profitability trend of the company is essential. </li></ul><ul><li>The financial risk should be minimized by analyzing the capital structure of the company. </li></ul>

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