Final answer:
The basic strategies used to control risk include diversification, hedging, asset allocation, and risk management.
Step-by-step explanation:
Basic Strategies to Control Risk
- Diversification: This strategy involves spreading your investments across different asset classes and industries to reduce the impact of any single investment.
- Hedging: Hedging involves using financial instruments such as options, futures, and derivatives to offset potential losses in your investments.
- Asset Allocation: This strategy involves diversifying your investments by allocating them to different classes of assets, such as stocks, bonds, and cash.
- Risk Management: Risk management involves identifying, assessing, and prioritizing risks, and implementing strategies to mitigate or control those risks.