Question

Which financial strategy would you choose to mitigate risk exposure? In your own words, present an example using XYZ company

Answer 1

Creating an Insurance fund

Step-by-step explanation:

An Insurance fund could a very good financial strategy to mitigate risk exposure.

For example, XYZ company is an bank that has over 500, 000 customer base throughout the country. XYZ company has forseen possible financial loses resulting from theft and economic downturn in the future. A safe practice would be to allocate a portion of it's profit– either quarterly or annual profit to an Insurance fund which would mitigate the company from possible financial risks resulting from theft or economic vices.

This financial strategy has proven to be successful in real life in mitigating a company from exposure to risk.