Definition of Risk:
Risk can be defined in many ways. When we think about the definition of risk, we think about the following:
- as any source of randomness or chance that an event may occur.
- Risk can have an adverse impact on the operations, assets, or cash flows of a company or individual.
- Risks can be financial versus non financial risks
Types of risk include the following:
- Financial risk
- Market Risk
- Funding risk
- Credit risk
- Liquidity risk
- Legal risk
- Natural or man made perils
- Accidents
- Hazards
- Human
- Environmental
- Mechanical
- Energy
- Chemical
Risk can also be broken down between Core and Non-Core risks.
- Core risks facing a business is the risk that the firm is in business to take and manage.
- Non-core risks are risks that the firm does not necessarily need to retain in order to operate in primary business.
Other related topics:
See Risk Management
