O'Reilly logo

Strategic Risk Taking: A Framework for Risk Management by Aswath Damodaran

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 10. Risk Management: Profiling and Hedging

To manage risk, we first have to understand the risks that we are exposed to. This process of developing a risk profile thus requires an examination of both the immediate risks from competition and product market changes as well as the more indirect effects of macroeconomic forces. We will begin this chapter by looking at ways in which we can develop a complete risk profile for a firm, where we outline all the risks that a firm is exposed to and estimate the magnitude of the exposure.

In the second part of this chapter, we turn to a key question of what we should do about these risks. In general, we have three choices. First, we can do nothing and let the risk pass through to investors in the ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required