Risk management in finance involves identifying, assessing, and mitigating financial risks to minimize potential losses and ensure stability. It’s a critical component of both personal finance and corporate finance, as it helps individuals, businesses, and financial institutions manage uncertainty and protect their assets.
Effective risk management is essential for maintaining financial stability and ensuring long-term success. By identifying and mitigating risks, individuals and organizations can protect their assets, reduce uncertainty, and achieve their financial objectives with greater confidence. In the broader economy, robust risk management practices contribute to the overall health and resilience of financial markets and institutions