FINANCIAL RISK

The financial risk is a major concern for all businesses through the fields and geographic areas. This is the reason behind the financial risk manager FRM examination to obtain a great recognition among financial experts worldwide. FRM are management professionals as more reliable risk and the world. The financial risk is again the concept of Level 1 based FRM exam. Before understanding of the techniques for controlling risk and application of risk management, it is very important to realize what is at risk and what types of risks. We will discuss the different types of risk in this post. The risk may be referred to as the chances of unexpected or negative results. Any work or activity that leads to loss of any kind can be described as a risk.

Types of risks.
There are different types of risks that may be facing the company and must be overcome. On a large scale, and risks can be classified into three types:

 Business risk.
Non commercial risks and financial risks. Business risk:is taking such risks that the companies themselves in order to maximize shareholder value and profits. For example: corporate risk high-cost marketing for the launch of a new product undertake in order to obtain an increase in sales.

 No risk Business.
These types of risks are not under the control of companies. The risks arising from political and economic imbalances can be described as non commercial risk.

Financial risk.
Financial risk as the term suggests is the risk involved in a financial loss for companies. Financial risks generally arise due to the instability and losses in the financial market as a result of changes in prices and currency values and interest rates, among others.