Final answer:
Risk management is the ability to spot problems, assess how to solve those problems, and prioritize efforts to implement solutions. It involves identifying potential risks, analyzing their likelihood and consequences, and taking appropriate measures to mitigate or eliminate them.
Step-by-step explanation:
Risk Management
Risk management is the ability to spot problems, assess how to solve those problems, and prioritize efforts to implement solutions.
It involves identifying potential risks, analyzing their likelihood and consequences, and taking appropriate measures to mitigate or eliminate them. For example, in the context of financial investments, risk management involves assessing the potential risks associated with different investment options, determining the level of risk tolerance, and diversifying the portfolio to minimize potential losses. Companies also perform risk management to identify and address potential operational, financial, or legal risks that could impact their business activities.
Insurance
Low-probability
Critical thinking