Risk- this is the likelihood of unexpected losses, shortfalls in profit or income compared to the predicted option due to a random change in economic conditions or unfavorable circumstances.

Risk classification.

In accordance with the areas of business activity, they usually distinguish: production, commercial, financial and insurance risk.

Financial risk- risk associated with the likelihood of loss of financial resources (cash).

Financial risks are divided into two types:

1) risks associated with the purchasing power of funds;

2) risks associated with investing capital (investment risks).

The risks associated with the purchasing power of funds include the following types of risks: inflation and deflation risks, currency risks, liquidity risk.

Inflationary risk- the risk that as inflation rises, cash income received depreciates in terms of real purchasing power faster than it grows. In such conditions, the entrepreneur suffers real losses.

Deflationary risk- the risk that with the growth of deflation there is a fall in the price level, a deterioration in the economic conditions of entrepreneurship and a decrease in income.

Currency risk- the risk of foreign exchange losses associated with changes in the exchange rate of one foreign currency in relation to another during foreign economic, credit and other foreign exchange transactions.

Liquidity risks- the risk associated with the possibility of losses when selling chain securities or other goods due to changes in the assessment of their quality and use value.

Investment - include the following subtypes of risks:

1) lost profits;

2) reduction in profitability;

3) direct financial losses.

Risk of lost profits- the risk of indirect (collateral) financial damage (lost profit) as a result of failure to implement any activity (for example, insurance, hedging, investing, etc.).

Risk of decreased profitability may arise as a result of a decrease in the amount of interest and dividends on portfolio investments, deposits and loans. Portfolio investments are associated with the formation of an investment portfolio and represent the acquisition of securities and other assets.

The risk of decreased profitability includes the following types: interest rate risks, credit risks.

To interest rate risks refers to the danger of losses that commercial banks, credit institutions, and investment institutions may incur as a result of the excess of the interest rates they pay on borrowed funds over the rates on loans provided. Interest risks also include the risks of losses that investors may incur due to changes in dividends on shares, interest rates on bonds, certificates and other securities in the securities market.

An increase in market interest rates leads to a decrease in the market value of securities, especially fixed-interest bonds. When the interest rate increases, a mass dump of securities issued at lower fixed interest rates and, according to the terms of the issue, accepted back early by the issuer, may also begin.

Interest rate risk is borne by an investor who has invested in medium- and long-term securities with a fixed interest rate at a current increase in the average market interest rate compared to a fixed level. In other words, the investor could receive an increase in income due to an increase in interest, but cannot release his funds invested under the above conditions.

Interest rate risk is borne by the issuer that issues medium-term and long-term securities with a fixed interest rate at a current decrease in the average market interest rate in comparison with the fixed level. In other words, the issuer could attract funds from the market at a lower interest rate, but he is already bound by the issue of securities. This type of risk, with rapid growth of interest rates in conditions of inflation, is also important for short-term securities.

Credit risk- the risk of non-payment by the borrower of the principal debt and interest due to the lender. Credit risk also refers to the risk that the issuer of a debt security will be unable to make interest or principal payments.

Credit risk can also be a type of risk of direct financial loss.

Risks of direct financial losses include the following types: exchange risk, selective risk, bankruptcy risk.

Exchange risks represent a danger of losses from exchange transactions. These risks include: the risk of non-payment on commercial transactions, the risk of non-payment of brokerage firm commissions, etc.

Selective risks(Latin - choice, selection) - these are the risks of incorrectly choosing the method of investing capital, the type of chain securities for investment in comparison with other types of securities when forming an investment portfolio.

Risk of bankruptcy represents a danger as a result of the wrong choice of the method of investing capital, the complete loss of the entrepreneur’s own capital and his inability to pay off his obligations. As a result, the entrepreneur becomes bankrupt.

Selective risks (Latin “selektio” - choice, selection) are the risk of incorrect choice of types of capital investment, type of securities for investment in comparison with other types of securities when forming an investment portfolio.

The risk of bankruptcy is a danger resulting from the wrong choice of capital investment, the complete loss of the entrepreneur's own capital and his inability to pay off his obligations.

Group 3 financial risks. Risks associated with the form of organization of economic activity include:

Advance

Turnover risks.

Advance risks arise when concluding any contract if it provides for the delivery of finished products against the buyer’s money. The essence of the risk is that the seller company (risk bearer) incurred certain costs during the production (or purchase) of goods, which at the time of production (or purchase) were not covered by anything, i.e. from the position of the risk holder's balance sheet, they can only be closed with the profit of previous periods. If a company does not have an effectively established turnover, it bears advance risks, which are expressed in the formation of warehouse stocks of unsold goods.

Turnover risk - assumes the onset of a shortage of financial resources during the period of regular turnover: with a constant rate of product sales, the enterprise may experience turnover of financial resources at different rates.

Portfolio risk is the probability of loss for individual types of securities, as well as for the entire category of loans. Portfolio risks are divided into financial, liquidity, systemic and non-systemic risks.

Liquidity risk is the ability of financial assets to quickly convert into cash.

Systemic risk - associated with changes in stock prices, their profitability, current and expected interest on bonds, expected dividends and additional profits caused by general market fluctuations. It combines the risk of changes in interest rates, the risk of changes in general market prices and the risk of inflation and can be predicted quite accurately, since the close connection (correlation) between the stock exchange rate and the general state of the market is regularly and quite reliably recorded by various stock indices.

Unsystematic risk does not depend on the state of the market and is specific to a particular enterprise or bank. It can be sectoral and financial. The main factors influencing the level of non-systematic portfolio risk are the availability of alternative areas of application (investment) of financial resources, the situation in commodity and stock markets, and others. The totality of systemic and non-systemic risks is called investment risk.

In the course of their activities, entrepreneurs face various risks, which differ in the place and time of occurrence, the combination of external and internal factors influencing their magnitude, and, consequently, in the methods of their analysis and methods of influence. Accordingly, there are many approaches to risk classification, which differ in the basis of classification.

The effectiveness of risk management organization (see clause 1.4) is primarily determined by the correct risk identification according to a scientifically developed classification system. Such a system includes categories, groups, types, subtypes and varieties of risks (see Fig. 1.1) and creates the prerequisites for the effective application of appropriate risk management methods and techniques. Moreover, each risk has its own risk management technique.

Let's discuss in more detail grounds classification scheme shown in Figure 1.1.

First of all, depending on the possible result (risk event), risks can be divided into two large groups: pure and speculative.

Pure risks mean the possibility of obtaining negative or zero result . These include risks natural, environmental, political, transport And part of commercial risks (property, production, trade).

Speculative risks expressed in the possibility of obtaining both positive and negative results . These include financial risks , which are part of commercial risks.

Depending on the main cause (basic or natural sign ), risks are divided into the following categories: natural, environmental, political, transport and commercial .

TO natural include risks associated with the manifestation of natural forces: earthquake, flood, storm, fire, epidemic, etc.

Environmental risks – these are risks associated with environmental pollution.

Political risks connected with the political situation in the country And

state activities . Political risks arise in case of violation of the conditions of the production and trading process for reasons not directly dependent on the business entity.

Transport risks - these are risks associated with the transportation of goods by transport: road, sea, river, rail, airplane, etc.

Commercial risks represent danger of losses in the process of financial and economic activities . They mean the uncertainty of the outcome of a given commercial transaction.

According to structural characteristics commercial risks are divided into property, production, trade, financial .

Property risks - these are the risks associated with the possibility of property loss citizen/entrepreneur because of theft, sabotage, negligence, overvoltage of technical and technological systems and so on.

Production risks - these are the risks associated with loss from production interruption due to the influence of various factors and, above all, with loss or damage to fixed and working capital (equipment, raw materials, transport, etc.), as well as risks associated with the introduction of new equipment and technology into production .

Trading risks represent risks associated with loss due to payment delays , refusal of payment during the transportation of goods , non-delivery of goods and so on.

Rice. 1.1. Risk classification

Financial risks connected with the possibility of loss of financial resources .

Financial risks are divided into two types:

1) risks associated with the purchasing power of money ;

2) risks associated with capital investment (investment risks ).

The risks associated with the purchasing power of money include the following types of risks: inflationary And deflationary risks, foreign exchange risks, liquidity risk .

Inflation risk - this is the risk that if inflation rises, the received cash incomes depreciate in terms of real purchasing power faster than they grow . In such conditions, the entrepreneur suffers real losses.

Deflationary risk - this is the risk that when deflation increases, falling price levels, worsening economic conditions for business and a decrease in income.

Currency risks represent danger of currency losses related with a change in the exchange rate of one foreign currency against another when conducting foreign economic, credit and other foreign exchange transactions.

Liquidity risks- these are the risks associated with the possibility of losses upon sale of securities or other goods due to changes in the assessment of their quality and use value.

Investment risks include the following subtypes of risks:

1) risk of lost profits;

2) profitability risk;

3) risk of direct financial losses.

Risk of lost profits- this is a risk the onset of indirect(collateral) financial damage(lost profit) as a result of failure to implement any activity (for example, insurance, hedging, investing and so on.).

Risk of decreased profitability may arise as a result reducing the amount of interest and dividends on portfolio investments, deposits and loans.

Portfolio investment connected with the formation of an investment portfolio and represent acquisition of securities and other assets. The term "portfolio" comes from the Italian "porto foglio" meaning the totality of securities that an investor holds.

Risk of decreased profitability includes the following varieties: interest rate risks And credit risks.

TO interest rate risks refers to the risk of losses that may be incurred commercial banks, credit institutions, investment institutions, selling companies as a result excess interest rates , paid them by funds raised , above the rates on loans provided . Interest rate risks also include risks of loss that may incur investors due with changes in dividends on shares, interest rates on bonds, certificates and other securities on the securities market.

Increase in market interest rate leads to reduction in the market value of securities , especially fixed interest bonds . When the percentage increases, it may also begin mass dump of securities ,issued at lower fixed interest rates and, according to the terms of issue, accepted back early by the issuer . Interest rate risk is borne by investor, who invested funds in the medium term And long-term securities with a fixed interest rate at a current increase in the average market interest rate compared to a fixed level. In other words, the investor could get an increase in income due to an increase in interest , But cannot release its funds invested under the above conditions .

Interest rate risk is borne by issuer, releasing medium-term and long-term securities with a fixed interest rate are put into circulation with the current decrease in the average market interest rate compared to the fixed level. In other words, the issuer could attract funds from the market at a lower interest rate , but he's already bound by the issue of securities .

This type of risk, with rapid growth of interest rates in conditions of inflation, is also important for short-term securities.

Credit risk - danger failure by the borrower to pay principal and interest due to the lender . Credit risk also includes the risk of an event in which issuer, issuer of debt securities , it turns out unable to pay interest or principal .

Credit risk maybe also a type of risk of direct financial loss .

Risks of direct financial losses include the following varieties: exchange risk, selective risk, bankruptcy risk, and credit risk .

Exchange risks represent danger of losses from stock exchange transactions . These risks include: risk of non-payment on commercial transactions, risk of non-payment of brokerage firm commissions and so on.

Selective risks (from Latin selectio - choice, selection) - these are risks incorrect choice of capital investment method, type of securities for investment in comparison with other types of securities when forming an investment portfolio.

Risk of bankruptcy poses a danger as a result wrong choice of investment method , complete loss of equity capital by the entrepreneur and his inability to pay off his obligations. As a result, the entrepreneur becomes bankrupt.

Financial risk represents function of time . Usually, the degree of risk for a given financial asset or investment option increases over time . For example, losses importer Today depend on the time from the moment the contract is concluded until the payment deadline for the transaction, because Foreign exchange rates against the Russian ruble continue to rise .

It should be noted that with any investment of capital there is always risk. Investment risks are divided into the following types:
- Risk of lost profits;
- Risk of reduced feasibility;
- Risk of direct financial costs.

Risk of direct lost profits- this is the risk of loss of profit due to failure to implement certain measures (for example, insurance, hedging, etc..)

Risk of decreased profitability may arise as a result of a decrease in the amount of interest and dividends on investments made, deposits, loans, etc... The risk of a decrease in profitability has such varieties as interest rate risks and credit risks.

To interest rate risks include the possibility of loss of income by commercial banks, credit institutions, investment institutions as a result of excess interest rates paid by them compared to those received for loans provided.

Credit risk- this is the danger of borrowers not paying debts and interest due to the lender. Credit risk is also a type of risk of direct financial losses.

In addition, the risk of direct financial losses includes stock exchange risks, selective risks and bankruptcy risks.

Exchange risks- this is the risk of losses from exchange transactions, for example, the risk of non-payment for commercial transactions, the risk of non-payment of commission to a brokerage firm, etc...

Selective risks- these are the risks of incorrect selection of types of investments, types of securities for investment in comparison with other investment opportunities.

Risk of bankruptcy represents a danger of complete loss of capital and inability to pay off obligations due to the wrong choice of investments.

Assessing the riskiness of income is the basis for making rational investment decisions. Risk is a measure of the variability or uncertainty of returns, which in turn consists of the expected earnings or returns from an investment.
Different investments bring different returns. The ratio of risk and income is such that the return on invested money should proportionally correspond to the riskiness of the deposit.
Rice. 2.4. Risk-return ratio.

Low risk is associated with low income. Tall - with tall ones. When there is no risk, investors receive income Y3, with a risk equal to X1 the income will be Y2, with a risk level of X2 investors will receive income Y1.
In finance, risk is determined by the level of variability in expected returns.
The magnitude of risk, or degree of risk, is measured by two criteria:
- Average expected value;
- Variability of possible results.

Average Expected Value- this is the value of the magnitude of the event, which is associated with the uncertainty of the situation. The average expected value is a weighted average of all possible outcomes, where the probability of each outcome is used as the frequency or severity of the corresponding value.
The average expected value measures the outcome we expect on average.

Example. There is a well-known situation when, when investing capital during the implementation of a project event out of 100 cases:
In 40 cases, a profit was made - 11 thousand UAH. (Probability 40%).
In 36 cases - 20 thousand UAH. (Probability 36%).
In 24 cases - 12 thousand UAH. (Probability 24%).
The average expected profit from the implementation of project activity A will be:
11 * 0.40 +20 * 0.36 +12 * 0.24 = 14.48 thousand UAH.
Suppose a similar calculation was made for project activity B and the following values ​​were obtained:
18 * 0.3 +20 * 0.5 +25 * 0.2 = 20.4 thousand UAH.
Comparing the two amounts of expected profit, we see that when investing capital in project activity A, the amount of profit received ranges from 11 to 20 thousand UAH, and the average value is 14.48 thousand UAH; In project activity B, the amount of profit received ranges from 18 to 25 thousand UAH, and the average value is 20.4 thousand UAH.
Consequently, the average value is a generalized quantitative characteristic and does not allow one to make a decision in favor of any investment option.
To make a final decision, it is necessary to measure the variability of indicators or the measure of fluctuations in a possible result.

Variability is the amount of fluctuation that happens to many values ​​when they deviate from a characteristic average value.
To measure variability in practice, two closely related indicators are used: dispersion and standard deviation.

Dispersion is the weighted average of the squared deviations of actual results from the expected average.

X is the expected value for each observation case;
X - average expected value;
n is the number of observation cases (frequency).

as the square root of the variance according to the formula:

Variance and standard deviation are measures of absolute variability. In addition to these two indicators, the coefficient of variation is used in the analysis.

This is the ratio of the standard deviation to the arithmetic mean, which shows the degree of deviation of the obtained values:

V - coefficient of variation,%;
G - standard deviation;
X is the average expected value.
The coefficient of variation is a relative value, and the absolute values ​​of the indicators do not affect its value. The coefficient of variation varies from 0 to 100%. The higher the coefficient, the greater the variability of the characteristic.

Example. The standard deviation is equal to when investing capital:
To project A:

To project B:

For project A:

For project B:

The coefficient of variation during the implementation of project activity B is significantly less than during the implementation of project activity A, which makes it possible to make a decision in favor of investing capital in project B.<.i>

There are other, simplified methods for determining the degree of risk.
From the investor’s point of view, risk quantitatively characterizes the probabilistic assessment of the maximum and minimum amount of income that can be received as a result of investment. Moreover, the greater the range between these values ​​with an equal probability of events occurring, the higher the degree of risk.
Then to calculate the indicators of dispersion, standard deviation and variation, the following formulas are used:

Probability of obtaining maximum profit (income, profitability);

- maximum amount of profit (income, profitability);
X - average, expected profit (income, profitability);

-probability of obtaining minimal profit (income, profitability);

-minimum amount of profit (income, profitability);
G - standard deviation;
v is the coefficient of variation.

Example. Choose the least risky investment option from the two, the data of which is given below.
First option. Profit with an average value of 15 thousand UAH. ranges from 10 to 20 thousand UAH. The probability of obtaining a minimum profit is 20%, maximum - 30%.
Second option. Profit with an average value of 20 thousand UAH. ranges from 15 to 25 thousand UAH. The probability of obtaining a minimum profit is 40%, maximum - 30%.

A comparison of the values ​​of the coefficients of variation shows that a lower degree of risk is inherent in the second investment option.

Solving investment risk problems is possible through the implementation of various means. Such means are avoiding, retaining, transferring, and reducing risk.

Risk avoidance achieve by refusing to implement a project that is associated with a high level of risk. However, in this case, the investor loses at the same time the chance of making a profit from the implementation of this project.

Risk retention involves placing the risk on the investor, that is, he must cover possible capital losses from an unsuccessful investment.

Transfer of risk means that the investor transfers the risk to another, for example, an insurance company.

Risk Reduction- this is a reduction in the likelihood and volume of losses.

The choice of specific means associated with solving risk problems is based on compliance with certain principles:
- 1st principle - you can only take risks within the limits that your own capital allows;
- 2nd principle - it is necessary to analyze investment projects taking into account the consequences of risk;
- 3rd principle - the risk of investing a large amount of money to obtain a small benefit is considered unjustified.

Implementation first principle means that the investment of capital must be preceded by an analysis, which consists of the following stages:
1) determination of the maximum possible damage during the implementation of the project (Umah);
2) comparison of the amount of losses by the amount of capital invested in the project (Kn);
3) comparison of the amount of losses with the volume of all financial resources (FR) of the capital investor;
4) determination of the risk coefficient ® based on the mentioned indicators.

The value of this coefficient is different for different investment projects and must be determined for each case separately.
However, there is a limit to the risk coefficient, upon reaching which there is a high probability of bankruptcy for the investor.

Implementation second principle means that after determining the risk coefficient, the investor must decide in favor of implementing the investment project and take the risk upon himself, refuse to invest in the project, or transfer responsibility for the risk to another person.

Action third principle involves determining the benefits for the investor from the implementation of the project compared to the investment of funds.
To reduce the degree of investment risk, various methods are used: diversification, limitation, insurance, etc. (See Fig. 2.5.). One of the most common is diversification.

Diversification- distribution of investment funds between individual objects that are not related to each other. Diversification helps dissipate risk and overall reduce its magnitude.
The activities of investment funds are based on the principle of diversification. Diversification allows you to reduce the risk of making a profit from business activity if you engage in different types of it.
Rice. 2.5. ways to reduce financial risk.

Limitation- this is the establishment of certain restrictions on expenses, sales, lending, etc., which is a significant means of reducing risks.

Insurance is ensured by a decrease in investor income when avoiding or reducing the degree of risk. Insurance is also one of the common ways to avoid risks or reduce their impact. During the insurance process, funds are redistributed between persons who insure deposits and persons who need payments from insurance funds.

Secuterization- this is the participation of two banks in the implementation of one project, and both banks perform different functions. One of them develops the terms and concludes an agreement, the second provides a loan to the borrower.

Risk classification

In the course of their activities, entrepreneurs face various risks, which differ in the place and time of occurrence, the combination of external and internal factors influencing their magnitude, and, consequently, in the methods of their analysis and methods of influence. Accordingly, there are many approaches to risk classification, which differ in the basis of classification.

The effectiveness of risk management organization (see clause 1.4) is primarily determined by the correct risk identification according to a scientifically developed classification system. Such a system includes categories, groups, types, subtypes and varieties of risks (see Fig. 1.1) and creates the prerequisites for the effective application of appropriate risk management methods and techniques. Moreover, each risk has its own risk management technique.

Let's discuss in more detail groundsclassification scheme shown in Figure 1.1.

First of all, depending on the possible result(risk event) risks can be divided into two large groups: pure and speculative.

Pure risks mean the possibility of obtaining negative or zero result . These include risks natural, environmental, political, transport And part of commercial risks (property, production, trade).

Speculative risks expressed in the possibility of obtaining both positive and negative results . These include financial risks , which are part of commercial risks.

Depending on the main cause (basic or natural sign ), risks are divided into the following categories: natural, environmental, political, transport and commercial .

To natural include risks associated with the manifestation of natural forces: earthquake, flood, storm, fire, epidemic, etc.

Environmental risks– these are risks associated with environmental pollution.

Political risks connected with the political situation in the country And

state activities. Political risks arise in case of violation of the conditions of the production and trading process for reasons not directly dependent on the business entity .

Transport risks - these are risks associated with the transportation of goods by transport: road, sea, river, rail, airplane, etc.

Commercial risks represent danger of losses in the process of financial and economic activities . They mean the uncertainty of the outcome of a given commercial transaction.

According to structural characteristics commercial risks are divided into property, production, trade, financial .

Property risks - these are the risks associated with the possibility of property loss citizen/entrepreneur because of theft, sabotage, negligence, overvoltage of technical and technological systems and so on.

Production risks- these are the risks associated with loss from production interruption due to the influence of various factors and, above all, with loss or damage to fixed and working capital (equipment, raw materials, transport, etc.), as well as risks associated with the introduction of new equipment and technology into production .

Trading risks represent risks associated with loss due to payment delays , refusal of payment during the transportation of goods , non-delivery of goods and so on.

Rice. 1.1. Risk classification

Financial risks connected with the possibility of loss of financial resources .

Financial risks are divided into two types:

1) risks associated with the purchasing power of money ;

2) risks associated with capital investment (investment risks ).

The risks associated with the purchasing power of money include the following types of risks: inflationary And deflationary risks, foreign exchange risks, liquidity risk .

Inflation risk - this is the risk that if inflation rises, the received cash incomes depreciate in terms of real purchasing power faster than they grow . In such conditions, the entrepreneur suffers real losses.

Deflationary risk - this is the risk that when deflation increases, falling price levels, worsening economic conditions for business and a decrease in income.

Currency risks represent danger of currency losses related with a change in the exchange rate of one foreign currency against another when conducting foreign economic, credit and other foreign exchange transactions .

Liquidity risks - these are the risks associated with the possibility of losses upon sale of securities or other goods due to changes in the assessment of their quality and use value .

Investment risks include the following subtypes of risks:

1) risk of lost profits ;

2) profitability risk ;

3) risk of direct financial losses .

Risk of lost profits - it's a risk the onset of indirect (collateral) financial damage (lost profit) as a result of failure to implement any activity (for example, insurance, hedging, investing and so on.).

Risk of decreased profitability may arise as a result reducing the amount of interest and dividends on portfolio investments, deposits and loans.

Portfolio investment connected with the formation of an investment portfolio and represent acquisition of securities and other assets . The term "portfolio" comes from the Italian "porto foglio" meaning the totality of securities that an investor holds.

Risk of decreased profitability includes the following varieties: interest rate risks And credit risks .

TO interest rate risks refers to the risk of losses that may be incurred commercial banks, credit institutions, investment institutions, selling companies as a result excess interest rates , paid them by funds raised , above the rates on loans provided . Interest rate risks also include risks of loss that may incur investors due with changes in dividends on shares, interest rates on bonds, certificates and other securities on the securities market .

Increase in market interest rate leads to reduction in the market value of securities , especially fixed interest bonds . When the percentage increases, it may also begin mass dump of securities , issued at lower fixed interest rates and, according to the terms of issue, accepted back early by the issuer . Interest rate risk is borne by investor, who invested funds in the medium term And long-term securities with a fixed interest rate at a current increase in the average market interest rate compared to a fixed level . In other words, the investor could get an increase in income due to an increase in interest , But cannot release its funds invested under the above conditions .

Interest rate risk is borne by issuer, releasing medium-term and long-term securities with a fixed interest rate are put into circulation with the current decrease in the average market interest rate compared to the fixed level . In other words, the issuer could attract funds from the market at a lower interest rate , but he's already bound by the issue of securities .

This type of risk, with rapid growth of interest rates in conditions of inflation, is also important for short-term securities.

Credit risk- danger failure by the borrower to pay principal and interest due to the lender . Credit risk also includes the risk of an event in which issuer, issuer of debt securities , it turns out unable to pay interest or principal .

Credit risk maybe also a type of risk of direct financial loss .

Risks of direct financial losses include the following varieties: exchange risk, selective risk, bankruptcy risk, and credit risk .

Exchange risks represent danger of losses from stock exchange transactions . These risks include: risk of non-payment on commercial transactions, risk of non-payment of brokerage firm commissions and so on.

Selective risks(from Latin selectio - choice, selection) - these are risks incorrect choice of capital investment method, type of securities for investment in comparison with other types of securities when forming an investment portfolio.

Risk of bankruptcy poses a danger as a result wrong choice of investment method , complete loss of equity capital by the entrepreneur and his inability to pay off his obligations . As a result, the entrepreneur becomes bankrupt.

Financial risk represents function of time . Usually, the degree of risk for a given financial asset or investment option increases over time . For example, losses importer Today depend on the time from the moment the contract is concluded until the payment deadline for the transaction, because Foreign exchange rates against the Russian ruble continue to rise .

Risk management can be characterized as a set of methods, techniques and activities that allow, to a certain extent, predict the occurrence of risk events And take measures to eliminate or reduce the negative consequences of the occurrence of such events .

Risk management is a specific area of ​​economic activity that requires deep knowledge in the field of business analysis, methods for optimizing business decisions, insurance business, psychology and much more. The main task of an entrepreneur in this area is to find an option that provides the optimal combination of risk and income for a given project, based on the fact that the more profitable the project, the higher the degree of risk during its implementation.

Risk management is a professional activity performed by professional institutes, insurance companies, as well as risk managers and insurance specialists.

Their tasks are: zone detection (regions) increased risk ; risk assessment ; analysis of the acceptability of a given level of risk for organization; development of measures to prevent or reduce risk ; in the event that a risky event has occurred, taking measures to ensure maximum possible compensation for the damage caused.

Among the main risk management principles the following can be distinguished:

· you cannot take more risks than your own capital can allow ;

· it is necessary to think about the consequences of risk ;

· You can't risk a lot for a little .

First principle requires that the entrepreneur:

Determined the maximum possible amount of loss in the event of a risk event;

Assessed whether losses would lead to bankruptcy of the enterprise.

Second principle. Knowing the maximum possible amount of loss, make a decision on accepting the risk on your own responsibility, transferring the risk to another person (case of risk insurance) or refusing the risk (i.e. from the event).

Third principle requires balancing the expected result (profit) with possible losses in the event of a risk event.

From the above it follows that the main risk management techniques are risk avoidance, risk reduction, risk acceptance .

Risk avoidance means refusal of an activity associated with risk. But at the same time, there may be losses from unused opportunities.

Risk Reduction involves reducing the likelihood and volume of losses. For example, transfer of risk to an insurance company, diversification of a securities portfolio.

Taking risks means leaving all or part of the risk with the entrepreneur. In this case, the entrepreneur decides to cover possible losses with his own funds.

The choice of one or another risk management technique is based on the following: basic rules :

Maximum winnings, maximum results with acceptable risk;

The optimal combination of winnings and risk, i.e. the option that has the highest ratio of income to losses;

The optimal probability of the result, i.e. choosing the option that has the maximum payoff.

The ultimate goal of risk management is to obtain the greatest profit with an optimal profit-risk ratio acceptable to the entrepreneur.

Risk management (see Fig. 1.2) involves the following steps:

1. Collection and processing of data.

2. Qualitative analysis of information involves identifying the sources and causes of risk, stages and work during which risk arises; identifying practical benefits and negative consequences, etc.

1 - data collection and processing,

2 - qualitative risk analysis,

3 - quantitative risk assessment;

4 - risk acceptability assessment,

5.11 - assessment of the possibility of risk reduction,

6, 12 - selection of methods and formation of risk reduction options,

8 - formation and selection of options for increasing risk,

7 - assessment of the possibility of increasing risk,

9, 13 - assessment of the feasibility of risk reduction,

10 - assessment of the feasibility of increasing risk,

14 - selection of risk reduction option,

15 - project implementation (risk acceptance),

16 - refusal to implement the project (avoidance, risk)

Rice. 1.2. Risk Management Process Flowchart

3. Quantitative analysis involves determining the probability of a risk and its consequences, determining the acceptable level of risk.

The most common methods for quantitative risk assessment are statistical methods and expert assessment methods.

The essence of statistical methods is that the statistics of losses and profits that have occurred in a given area are studied and the most probable forecast for the future is compiled. These methods require a significant amount of data and appropriate mathematical support.

The use of expert assessment methods involves obtaining quantitative risk assessments based on processing the opinions of experienced entrepreneurs or specialists.

4. Measures to eliminate and minimize risk include the following steps:

Assessing the acceptability of the resulting risk level;

Assessing the possibility of reducing risk or increasing it while increasing the expected return;

Selecting methods to reduce (increase) risks.

Topic 2. Quantitative characteristics and risk assessment schemes under conditions of uncertainty .

Consequence matrix. Risk matrix. Analysis of a coupled group of decisions under conditions of complete uncertainty. Wald's rule. Savage's rule. Hurwitz's rule. Analysis of a coupled group of decisions under conditions of partial uncertainty. Pareto optimality taking into account two characteristics of a financial transaction. Laplace's rule of equal opportunity.