How to do risk management?

Question Posted / kavitas_k

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How to do risk management?..

Answer / nitin nimkar

for investor

1) by diversifying the securities in portfolio according to
goal
2) by keeped emergency saving
3) by using credit wisely
4) by frequently reviewing & majoring the portfolio

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How to do risk management?..

Answer / mercy

Risk management is done to minimize the frequency of the
risk and also the impact assosciated with the risk.

2 activities assosciated with risk management are:

1. Risk reduction methods
2. Contingency Planning

1. Risk Reduction methods: As risk is frequency multiplied
by loss assosciated with the risk, to reduce risk we must
reduce both the risk and also the impact of the loss.

Loss = Frequency of loss * Loss per occurence

Frequency of loss can be reduced by reduce opportunity of
an error and Identify error prior to loss.

Using a web site example, you could reduce the opportunity
for customers to leave the web site by
designing the web site so that any customer need can be
identified in “three clicks” or less. To
implement the other means, to identify the error prior to
loss, you could track a customer as they
move through the web site to determine if they are making
too many clicks. If they make too
many, transfer the customer to a web site operator who
could correctly assist the customer.

Loss per occurence can be mimimized by minimize loss and
recover loss.

The loss per occurrence associated with an unfavorable
event can likewise be reduced in two
ways. The loss can be minimized, or an attempt can be made
to recover the loss. Offering a
customer the opportunity to talk directly to an individual
might minimize the potential loss. If the
customer’s e-mail address can be captured, a follow-up
message could go to the customer in an
attempt to reestablish the relationship with that customer,
and thus, recovering the loss of a sale.

Contingency planning: This is like a back up plan drafted
when an unfavourable event happens to continue business
operations.

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