– Unit1-SetB
1
Essential Steps in a Risk
Management Process
BUSN306-FINA304 –
Unit1-SetB
– Unit1-SetB
2
Risk Management Process
Step 1: Identification of Risk Factors
Step 2: Measurement and analysis of
Risk Exposure
Step 3: Handling of Risk Exposure
Step 1: Identify risk factors
–identify potential sources of risk
–is a Company and/or industry specific process
(i.e. cannot be generalised)
Step 2: Measuring risk Exposure
Non Quantitative analysis
Quantitative analysis
–Analytical solution (i.e. close form solution)
Gives an exact answer (provided the inputs are correct)
