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WHAT IS RISK??

There is no definite or commonly accepted

definition of term risk.

The meaning of this term is used differently at

different situations. Some of the known authorities mentioned risk

as.

Boon and Kurtz -risk is the chance of loss or

injury Frank h.knight -risk is a measurable un

certainty

Dannenberg -risk is uncertainty of loss

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CLASSIFICATION OF RISKS:-

Property,litability,personal risks.

Physical,social,economic risks

Static and dynamic risks.

Fundamental and particular risks.

Speculative and pure risks.

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PROPERTY, LIABILITY, PERSONAL RISKS..

Property Risks relates to property arises on

accounts of the loss of business property or the

family property. just like.

fire accidentsnatural calamities

motor accidents

loss happened to any enterprise is called liability

risks. Personal risks include person death in family or

death of important member

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PHYSICAL,SOCIAL,ECONOMIC RISKS.

The expected losses to property due to occurrence

of natural calamities like cyclone,fire,floods etc is

called physical risk.

Social risk are the result of the behavior and

attitude of any person. For example ..employees

strike and civil disturbances.

Economic risks are the result of uncertainty in

production process, fluctuations.

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STATICAND DYNAMIC RISK..

Static risk means which are created due to

human errors.

Dynamic risks are those.

which are created due to changes

taking place in business environment.

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FUNDAMENTALAND PARTICULAR RISK

Fundamental risks are always connected withgroups.

Particular risks are originated by the action of a

particular person. such risks can be controlled by

the particular individual.

for example- risks caused due to death or

incapacity of earning member of the family.

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Speculative risks are

risks which may give

profit or loss.

These risks exists in

business transactions.

These risks are

generally under takenby business men

Pure risk are those in

which there is

possibility of any kind

of profit.

Majority of pure risks

are insured by life

insurance ,Fire and

marine insurance.

Speculative risk Pure risk

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METHODS OF HANDLING RISKS

Avoidance of risk method.

Risk reduction method.

Risk retention method.

Risk transfer method.

Combination method.

Hedging method.

Research method.

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AVOIDANCE OF HANDLING RISK

This method suggests to keep away from doing any actinvolving risks.

Any of the following methods may be suggested to avoidrisks..

1. To keep away from any act involving risks.dont drivescooter to keep away from any possible road accidents.

2. dont use desert cooler to prevent electric shock.

3. Keep valuable items like cash ,ornaments in bank toavoid risk.

4. Avoid polluted areas.

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Avoidance of risk is very simple. on businesspoint of view ,this method is considered to be not

good method.

Business always avoid risks and uncertainty.

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RISK REDUCTION METHOD

It include some following steps to reduce risk..

1. In factories, by fencing the dangerous machines,

work never such machines can be protected.

2. No smoking can be one of the reduction of fire

accidents.

3. By installing fire fighting appliances the risk of

loss due to fire accidents can be reduced.

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RISK RETENTION METHOD

In this method of risk handling method, a personfenced with risks may decide to bear the loss ofrisk by himself.

Some people create a contingency fund of thispurpose .

Large enterprises can use this method because

they have vast resources.

But in small and medium enterprises this risk isnot suitable..

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RISK TRANSFER METHOD

Twomethods

Transfer ofrisk to

insurancecompany

Involvesheavy risk

istransferred

to other

individual

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HEDGING METHOD

Risk can be handled effectively by this method.

This is followed by business enterprises to reduce

risks.

This method is just reverse to trading

transactions.

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Researchmethod

Test in

market whenintroducingnew product

Marketsuggestions

analysis

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PRESENTATION BY..

07 &03

G.B.Anjali

D.Anjani

06&05

D.Gowtham

Durgar gazal

04&08

02

Chetan, G.rajeev

Ambethkar.M

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