Page 173 - AFM Integrated Workbook STUDENT S18-J19

Chapter 9

An introduction to risk management

Outcome

By the end of this session you should be able to:

 explain the theoretical and practical rationale for the management of risk,

 assess the organisation’s exposure to business and financial risk,

 develop a framework for risk management, comparing and contrasting risk
mitigation, hedging and diversification strategies,

 establish capital investment monitoring and risk management systems,

 outline the application of probability analysis, sensitivity analysis and Monte
Carlo simulation to investment appraisal,

 demonstrate an understanding of the measurement and interpretation of project
value at risk,

 discuss the operation of the derivatives market,

and answer questions relating to these areas.

The underpinning detail for this chapter in your Integrated Workbook can
be found in Chapter 9 of your Study Text

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