6 Running Head: FINANCIAL RISK MANGEMENT Joy Nissan 11/2/15 Risk management Introduction: Financial Banks are very important in today’s economic it is a need for security it is first priority. It saves people hard earned money it is used for the future for the future. Bank’s are important to customers credit and reputation in the market. This risk management is required to confidential data and wrong doing. It is to save the credit and the trust of the customers. Therefore it is required by risk management to protect the customers rights. This paper will explain the financial risk management and the risk that the management factor’s such as credit, operational risk, and also commodity and increase the knowledge and understanding. This will help and increase the knowledge of future exploration of this topic. Financial risk is a term including transaction from company loans that risk default. The financial risk is a qualitative and utilized to solve issues as problems arise. The financial risk are specially focuses on how to use instruments to handle cost to exposure that is at risk. The financial risks not only identifies the risk that are potential but also it takes precautionary risk that reduce the risks. If you make an investment by financial institution it itself is exposure to the risks internally and externally that is possible inflation and to the capital markets as well as bankruptcy and volatility as well as recession. The Financial Risks and Analysis of Factors The financial risks that pertains to industry that are the main aspects need to be considered, effectively and efficiently to resolve any order that ensures business success. The following will describe the three risk factors below. Credit: This is basically related to the loss of the principal of the borrower’s loan that is repay to meet the contractual obligation of the bank. Its is credit that whenever a borrower is expecting to repay a debit. It is considered a credit risk that issuers or borrowers of debt obligation. This shows the banks inability to return funds to the depositors also termed as risk to the credit. In most cases the insolvent banks shows that inability to return funds to the depositors also termed as a credit risk. In most cases the government grants bankruptcy and government grants. It also gives protection to the customers for the business and insurances in the form of the mortgage and insurance of guarantees of third parties. Commodity It is substance that is grains, and metals that is interchangeable with other products, in which a investors buy or sells usually through futures contracts. Risk is actually reason exchange trading the basic agricultural products. It is also a product that trade on exchange for foreign currencies and instruments and indexes. This is a risk that basically referring to the uncertainties in the future. Its affects the size a.

1. 6
Running Head: FINANCIAL RISK MANGEMENT
Joy Nissan
11/2/15
Risk management
Introduction: Financial Banks are very important in today’s
economic it is a need for security it is first priority. It saves
people hard earned money it is used for the future for the future.
Bank’s are important to customers credit and reputation in the
market. This risk management is required to confidential data
and wrong doing. It is to save the credit and the trust of the
customers. Therefore it is required by risk management to
protect the customers rights. This paper will explain the
financial risk management and the risk that the management
factor’s such as credit, operational risk, and also commodity
and increase the knowledge and understanding. This will help
and increase the knowledge of future exploration of this topic.
Financial risk is a term including transaction from company
loans that risk default.
The financial risk is a qualitative and utilized to solve issues as
problems arise. The financial risk are specially focuses on how
to use instruments to handle cost to exposure that is at risk. The
financial risks not only identifies the risk that are potential but

2. also it takes precautionary risk that reduce the risks.
If you make an investment by financial institution it itself is
exposure to the risks internally and externally that is possible
inflation and to the capital markets as well as bankruptcy and
volatility as well as recession.
The Financial Risks and Analysis of Factors
The financial risks that pertains to industry that are the main
aspects need to be considered, effectively and efficiently to
resolve any order that ensures business success. The following
will describe the three risk factors below.
Credit: This is basically related to the loss of the principal of
the borrower’s loan that is repay to meet the contractual
obligation of the bank. Its is credit that whenever a borrower is
expecting to repay a debit. It is considered a credit risk that
issuers or borrowers of debt obligation.
This shows the banks inability to return funds to the depositors
also termed as risk to the credit. In most cases the insolvent
banks shows that inability to return funds to the depositors also
termed as a credit risk. In most cases the government grants
bankruptcy and government grants.
It also gives protection to the customers for the business and
insurances in the form of the mortgage and insurance of
guarantees of third parties.
Commodity
It is substance that is grains, and metals that is interchangeable
with other products, in which a investors buy or sells usually
through futures contracts. Risk is actually reason exchange
trading the basic agricultural products. It is also a product that
trade on exchange for foreign currencies and instruments and
indexes.
This is a risk that basically referring to the uncertainties in the
future. Its affects the size and the income of financial income
because the prices fluctuation of the commodities and the
currency movements. This financial invest in gold, energy
resources and other increasing financial returns that prices
increases or profits for investment. It is a business commodities

3. due to certainty of financial risks.
Operational Risks
Is a form that summarizes the risk a company or firm undertakes
within a given a field or industry. It is a risk that that is not
inherent it is a financial and systematic risk and include the risk
of break down, in people and systems.
The Operational risk is a link with the change in value and a
inadequate of failed processes value that caused or failed
internal processes. The operational risk is generally linked with
the risk in any value is caused by inadequate or failed internal
process. The operational risk is linked from external events this
includes legal affects that come from internal processes. The
risk is linked with people and systems as well from external
events, The risks are bank related to fraud security and privacy
protection, that harm the public credits in case of misuses of
personal data. It is also known as management of specific old
process that a banking systems has for priority to prevent fraud
and maintain the internal controls with the reduce the errors in
transaction processing.
Interest Rate Risk is an investment that value will change due to
a absolute level of interest rate it is also a yield curve or any
other interest rate. Changes can affect inversely securities and
can be reduced by diversifying with a fixed income securities or
hedging known as a interest rate swap.
It affects the value of a bond and also directly than a stock and
its major risk to all bondholders. An interest rate increases and
decreases since investors are able to switch to the other
investments that reflect t higher interest rate. If a bond is 5%
and the interest rate decreases the bondholder will receive a
fixed rate it is known as a relative fixed rate in the market. This
is offering a lowering rate of return as result of decrease in rate.
The effect of the Market is a fundamental principle bond that
market prices are generally going up and move in the opposite
directions. The fixed prices are bonds that fall. The interest rate

4. risk is phenomenon when interest rate rises and bonds are fixed.
Credit has been a effect on the real of economic activity since
1930s. Its not surprising that crisis has also produced a lot of
markets to lose large amount of money it is unprecedented and
volatility.
Foreign exchange risk
is a risk that exists in exchange rate it is a risk that investors
will close out in long or short position in on foreign currency
due to a loss of adverse. Money must be converted in currency
to make certain investments this will allow the change in
currency exchange rate to cause that investments value to either
decrease or increase when sold it will converted back to its
original currency.
The currency price is a term that another country uses for its
term. The exchange rate has two components the domestic
currency and the foreign currency. An exchange rate that has a
domestic currency is two currency is known as a cross currency
or cross rate. The base currency is a counter currency.
Most exchange rates are US dollars the base currency and the
other currencies are counter currency they are to four places the
decimal except currency quotations involving the Japanese yen
and the two decimal place after. Example The US dollar is $1=
C.1050 The base currency is the US dollar the currency is the
Canadian dollar This would comprise the direct quotation in
Canadian dollar .
C$1= US 0.9050=90.50 cents. In here the currency is based by
the currency of Canadian dollar when US dollar this would be
indirect of the Canadian dollar in Canada. The exchange rate
floating on fixed. While the floating exchange rate the market
are force in major nations to fix their domestic currencies to
widely accept currency of the US
Credit is a important factor in any one life’s everyone needs it

5. without it you can buy anything. So It is very important to pay
your credit card bills on time and not fall behind. Credit is a
trust to a party that provides money . This is resource provided
by financial or goods or services to customer credit.
It does not have to involve money it’s a credit a concept that is
a barter between goods and exchange of services. Credit is a
financial capital movement that normally depends on either
credit or equity transfers. Credit is the trust which allows the
first party to pay or arrange at later time.
Movement of the financial capital are normally on either credit
or equity transfer. Credit is in turn dependent on the
creditworthiness of the funds. The types of credit are
Trade Credit is a common word in trade term to approval for
delayed payment
Consumer Credit is a good or service that is provided by
individual lieu or payment.
Charges are presented in many different forms it a mandatory
and charges in the form of annual percentage rate. The APR is a
calculation to promote truth in lending. The optional charge are
not included.
The consumer debt can be defined as goods or money and given
the size of the loan the market mortgage lending is separate then
personal borrowing loan. The cost are integral part of the credit
agreement. This is financial capital and it all depends on the
credit of the insurer.
In conclusion the financial risk of management is very
important factor that is institution that important in financial to
protect the adverse of the firm. Risk management is helpful for
customers personal information and the protection from
bankruptcy. This is important for all firms to be considered for
growth of any firm.

6. References:
Credit [def. 2c]. (n.d.). In Merriam Webster Online. Retrieved 5
March 2015, from [1]
1 r; Steven M. Sheffrin (2003).. Upper Saddle River, New
Jersey 07458: Pearson Prentice Hall. p. 512.
2 Ingham, G. (2004). The Nature of Money. Polity Press.
pp. 12–19.
3 ^ Finlay, S. (2009). Consumer Credit Fundamentals (2nd
ed.). Palgrave Macmillan.
McNeil, Alexander J.; Frey, Rüdiger; Embrechts, Paul (2005).
Quantitative risk management: concepts, techniques and tools.
Princeton University
4 B"How Important is Financial Risk?". Journal of Financial
and Quantitative Analysis. forthcoming.
5 Risk.net "Financial Risk Management News & Analysis
6 MacroRisk Analytics “Patented and proprietary macro risk
measurements and tools for investors since 1999”.
7 Elements of Financial Risk Management, 2nd Edition
8 Quantitative Risk Management: A Practical Guide to Financial
Risk
9 Understanding Derivatives: Markets and Infrastructureartram,
Söhnke M.; Brown, Gregory W.; Waller, William (August
2013).
Federal Reserve Bank of Chicago, Financial Markets Grou
6
Running Head: FINANCIAL RISK MANGEMENT

7. Joy Nissan
11/2/15
Risk management
Introduction: Financial Banks are very important in today’s
economic it is a need for security it is first priority. It saves
people hard earned money it is used for the future for the future.
Bank’s are important to customers credit and reputation in the
market. This risk management is required to confidential data
and wrong doing. It is to save the credit and the trust of the
customers. Therefore it is required by risk management to
protect the customers rights. This paper will explain the
financial risk management and the risk that the management
factor’s such as credit, operational risk, and also commodity
and increase the knowledge and understanding. This will help
and increase the knowledge of future exploration of this topic.
Financial risk is a term including transaction from company
loans that risk default.
The financial risk is a qualitative and utilized to solve issues as
problems arise. The financial risk are specially focuses on how
to use instruments to handle cost to exposure that is at risk. The
financial risks not only identifies the risk that are potential but
also it takes precautionary risk that reduce the risks.
If you make an investment by financial institution it itself is
exposure to the risks internally and externally that is possible
inflation and to the capital markets as well as bankruptcy and
volatility as well as recession.
The Financial Risks and Analysis of Factors
The financial risks that pertains to industry that are the main
aspects need to be considered, effectively and efficiently to
resolve any order that ensures business success. The following

8. will describe the three risk factors below.
Credit: This is basically related to the loss of the principal of
the borrower’s loan that is repay to meet the contractual
obligation of the bank. Its is credit that whenever a borrower is
expecting to repay a debit. It is considered a credit risk that
issuers or borrowers of debt obligation.
This shows the banks inability to return funds to the depositors
also termed as risk to the credit. In most cases the insolvent
banks shows that inability to return funds to the depositors also
termed as a credit risk. In most cases the government grants
bankruptcy and government grants.
It also gives protection to the customers for the business and
insurances in the form of the mortgage and insurance of
guarantees of third parties.
Commodity
It is substance that is grains, and metals that is interchangeable
with other products, in which a investors buy or sells usually
through futures contracts. Risk is actually reason exchange
trading the basic agricultural products. It is also a product that
trade on exchange for foreign currencies and instruments and
indexes.
This is a risk that basically referring to the uncertainties in the
future. Its affects the size and the income of financial income
because the prices fluctuation of the commodities and the
currency movements. This financial invest in gold, energy
resources and other increasing financial returns that prices
increases or profits for investment. It is a business commodities
due to certainty of financial risks.
Operational Risks
Is a form that summarizes the risk a company or firm undertakes
within a given a field or industry. It is a risk that that is not
inherent it is a financial and systematic risk and include the risk
of break down, in people and systems.
The Operational risk is a link with the change in value and a
inadequate of failed processes value that caused or failed
internal processes. The operational risk is generally linked with

9. the risk in any value is caused by inadequate or failed internal
process. The operational risk is linked from external events this
includes legal affects that come from internal processes. The
risk is linked with people and systems as well from external
events, The risks are bank related to fraud security and privacy
protection, that harm the public credits in case of misuses of
personal data. It is also known as management of specific old
process that a banking systems has for priority to prevent fraud
and maintain the internal controls with the reduce the errors in
transaction processing.
Interest Rate Risk is an investment that value will change due to
a absolute level of interest rate it is also a yield curve or any
other interest rate. Changes can affect inversely securities and
can be reduced by diversifying with a fixed income securities or
hedging known as a interest rate swap.
It affects the value of a bond and also directly than a stock and
its major risk to all bondholders. An interest rate increases and
decreases since investors are able to switch to the other
investments that reflect t higher interest rate. If a bond is 5%
and the interest rate decreases the bondholder will receive a
fixed rate it is known as a relative fixed rate in the market. This
is offering a lowering rate of return as result of decrease in rate.
The effect of the Market is a fundamental principle bond that
market prices are generally going up and move in the opposite
directions. The fixed prices are bonds that fall. The interest rate
risk is phenomenon when interest rate rises and bonds are fixed.
Credit has been a effect on the real of economic activity since
1930s. Its not surprising that crisis has also produced a lot of
markets to lose large amount of money it is unprecedented and
volatility.
Foreign exchange risk
is a risk that exists in exchange rate it is a risk that investors

10. will close out in long or short position in on foreign currency
due to a loss of adverse. Money must be converted in currency
to make certain investments this will allow the change in
currency exchange rate to cause that investments value to either
decrease or increase when sold it will converted back to its
original currency.
The currency price is a term that another country uses for its
term. The exchange rate has two components the domestic
currency and the foreign currency. An exchange rate that has a
domestic currency is two currency is known as a cross currency
or cross rate. The base currency is a counter currency.
Most exchange rates are US dollars the base currency and the
other currencies are counter currency they are to four places the
decimal except currency quotations involving the Japanese yen
and the two decimal place after. Example The US dollar is $1=
C.1050 The base currency is the US dollar the currency is the
Canadian dollar This would comprise the direct quotation in
Canadian dollar .
C$1= US 0.9050=90.50 cents. In here the currency is based by
the currency of Canadian dollar when US dollar this would be
indirect of the Canadian dollar in Canada. The exchange rate
floating on fixed. While the floating exchange rate the market
are force in major nations to fix their domestic currencies to
widely accept currency of the US
Credit is a important factor in any one life’s everyone needs it
without it you can buy anything. So It is very important to pay
your credit card bills on time and not fall behind. Credit is a
trust to a party that provides money . This is resource provided
by financial or goods or services to customer credit.
It does not have to involve money it’s a credit a concept that is
a barter between goods and exchange of services. Credit is a
financial capital movement that normally depends on either
credit or equity transfers. Credit is the trust which allows the

11. first party to pay or arrange at later time.
Movement of the financial capital are normally on either credit
or equity transfer. Credit is in turn dependent on the
creditworthiness of the funds. The types of credit are
Trade Credit is a common word in trade term to approval for
delayed payment
Consumer Credit is a good or service that is provided by
individual lieu or payment.
Charges are presented in many different forms it a mandatory
and charges in the form of annual percentage rate. The APR is a
calculation to promote truth in lending. The optional charge are
not included.
The consumer debt can be defined as goods or money and given
the size of the loan the market mortgage lending is separate then
personal borrowing loan. The cost are integral part of the credit
agreement. This is financial capital and it all depends on the
credit of the insurer.
In conclusion the financial risk of management is very
important factor that is institution that important in financial to
protect the adverse of the firm. Risk management is helpful for
customers personal information and the protection from
bankruptcy. This is important for all firms to be considered for
growth of any firm.
References:
Credit [def. 2c]. (n.d.). In Merriam Webster Online. Retrieved 5
March 2015, from [1]
1 r; Steven M. Sheffrin (2003).. Upper Saddle River, New
Jersey 07458: Pearson Prentice Hall. p. 512.

12. 2 Ingham, G. (2004). The Nature of Money. Polity Press.
pp. 12–19.
3 ^ Finlay, S. (2009). Consumer Credit Fundamentals (2nd
ed.). Palgrave Macmillan.
McNeil, Alexander J.; Frey, Rüdiger; Embrechts, Paul (2005).
Quantitative risk management: concepts, techniques and tools.
Princeton University
4 B"How Important is Financial Risk?". Journal of Financial
and Quantitative Analysis. forthcoming.
5 Risk.net "Financial Risk Management News & Analysis
6 MacroRisk Analytics “Patented and proprietary macro risk
measurements and tools for investors since 1999”.
7 Elements of Financial Risk Management, 2nd Edition
8 Quantitative Risk Management: A Practical Guide to Financial
Risk
9 Understanding Derivatives: Markets and Infrastructureartram,
Söhnke M.; Brown, Gregory W.; Waller, William (August
2013).
Federal Reserve Bank of Chicago, Financial Markets Grou