HOW TO MANNAGE FINANCIAL RISK
Objective of the E- BOOK To minimise the financial risk Key Learnings from the Video 1. What is financial risk? When a company or an individual fails to meet financial obligations, it is known as “Financial risk.” For example: An individual raises a personal loan from the bank and fails to repay the loan. This is a financial risk. 2. Impact of financial risk The impact of financial risk on the following 5 stakeholders is as follows: Companies: Companies face debt due to financial risk. Investors: Investors face loss of invested capital in the companies such as DHFL, Gitanjali, and Jet Airways, etc. In all these companies, investors lost their money because these companies failed to repay their loan amount. Individuals: When an individual fails to pay a loan amount that is more than his income, he will face losses. Government: When a government borrows money from IMF and World Bank and it fails to repay the loan, the government defaults. Financial markets:...